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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 11, 1996
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SANTA FE ENERGY RESOURCES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-2722169
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1616 SOUTH VOSS ROAD
HOUSTON, TEXAS 77057
(Address, including zip code, of Principal Executive Offices)
SANTA FE ENERGY RESOURCES
SAVINGS INVESTMENT PLAN
(Full title of the plan)
DAVID L. HICKS
VICE PRESIDENT - LAW AND GENERAL COUNSEL
SANTA FE ENERGY RESOURCES, INC.
1616 SOUTH VOSS ROAD
HOUSTON, TEXAS 77057
(713) 783-2401
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------------
COPY TO:
G. MICHAEL O'LEARY
ANDREWS & KURTH L.L.P.
4200 TEXAS COMMERCE TOWER
600 TRAVIS
HOUSTON, TEXAS 77002
(713) 220-4200
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TO BE OFFERING PRICE OFFERING REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED (1) REGISTERED PER SHARE (2) PRICE (2) FEE
- ----------------------------------------------- --------------- ------------------ ---------------- ------------------
<S> <C> <C> <C> <C> <C>
Common Stock, Par Value $.01 Per Share 500,000 $ 11.9375 $ 5,968,750 $ 2,059
=============================================== =============== ================== ================ ==================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the employee benefit plan described herein.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h), based upon the average of the high and low prices
of a share of the Company's Common Stock for July 8, 1996 on the New York
Stock Exchange [as reported in THE WALL STREET JOURNAL on July 9, 1996.]
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
This Registration Statement on Form S-8 is being filed solely
to register additional securities. In accordance with General Instruction E of
Form S-8, the Company hereby incorporates by reference the contents of the
Company's registration statement on Form S-8 (No. 33-37175), filed with the
Securities and Exchange Commission on October 5, 1990, its registration
statement on Form S-8 (No. 33-44542), filed with the Securities and Exchange
Commission on December 16, 1991, and its registration statement on Form S-8 (No.
33-58613), filed with the Securities and Exchange Commission on April 14, 1995,
relating to the Santa Fe Energy Resources Savings Investment Plan.
ITEM 8. EXHIBITS.
Exhibit
NUMBER DESCRIPTION
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Independent Auditors.
23.2 Consent of Ryder Scott Company Petroleum Engineers.
24.1 Power of Attorney (included in signature page).
99.1 Santa Fe Energy Resources Savings Investment Plan, as amended
and restated.
In addition, the registrant hereby undertakes to submit the
Santa Fe Energy Resources Savings Investment Plan, as amended and restated, to
the Internal Revenue Service (the "IRS") in a timely manner and will make any
and all changes as may be required by the IRS in order to qualify the plan under
Section 401 of the Internal Revenue Code.
II-1
SIGNATURES
THE REGISTRANT. 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 Houston, State of Texas, on the 2nd day of July,
1996.
SANTA FE ENERGY RESOURCES, INC.
(Registrant)
By: /s/ JAMES L. PAYNE
James L. Payne
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and directors of Santa Fe Energy Resources, Inc. (the "Company") hereby
constitutes and appoints James L. Payne, R. Graham Whaling and David L. Hicks,
or either of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution, for him and
on his behalf and in his name, place and stead, in any and all capacities, to
sign, execute and file this Registration Statement under the Securities Act of
1933, as amended, and any or all amendments (including, without limitation,
post-effective amendments), with all exhibits and any and all documents required
to be filed with respect thereto, with the Securities and Exchange Commission or
any regulatory authority, granting unto such attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as he himself might or
could do, if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ JAMES L. PAYNE Chairman, President, July 2, 1996
James L. Payne Chief Executive Officer
and Director (Principal
Executive Officer)
/s/ R. GRAHAM WHALING Senior Vice President and July 2, 1996
R. Graham Whaling Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/ WILLIAM E. GREEHEY Director July 2, 1996
William E. Greehey
/s/ CRAIG HUFF Director July 2, 1996
Craig Huff
___________________ Director ______, 1996
Melvyn N. Klein
/s/ ALLAN V. MARTINI Director July 2, 1996
Allan V. Martini
/s/ MICHAEL A. MORPHY Director July 2, 1996
Michael A. Morphy
/s/ REUBEN F. RICHARDS Director July 2, 1996
Reuben F. Richards
II-2
___________________ Director ______, 1996
Marc J. Shapiro
/s/ ROBERT F. VAGT Director July 2, 1996
Robert F. Vagt
/s/ KATHRYN D. WRISTON Director July 2, 1996
Kathryn D. Wriston
II-3
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Act of 1933,
the Employee Benefits Committee (which administers the subject plan) has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas,
on July 2, 1996.
Santa Fe Energy Resources Savings Investment Plan
By: /s/ CHARLES G. HAIN, JR.
Charles G. Hain, Jr.
Chairman, Employee Benefits Committee
II-4
EXHIBIT INDEX
Exhibit
Number
-------
5.1 Opinion Letter of Andrews & Kurth L.L.P.
23.1 Consent of Independent Auditors.
23.2 Consent of Ryder Scott Company Petroleum Engineers.
24.1 Power of Attorney (included in signature page).
99.1 Santa Fe Energy Resources Savings Investment Plan,
as amended and restated.
Exhibit 5.1
July 9, 1996
Board of Directors
Santa Fe Energy Resources, Inc.
1616 South Voss Road
Houston, Texas 77057
Ladies and Gentlemen:
We have acted as counsel to Santa Fe Energy Resources, Inc. (the
"Company") in connection with the Company's Registration Statement on Form S-8
(the "Registration Statement") relating to the registration under the Securities
Act of 1933, as amended, of the issuance of up to an additional 500,000 shares
(the "Shares") of the Company's common stock, $0.01 par value (the "Common
Stock"), pursuant to the Santa Fe Energy Resources Savings Investment Plan, as
amended and restated (the "Plan").
In connection herewith, we have examined copies of such statutes,
regulations, corporate records and documents, certificates of public and
corporate officials and other agreements, contracts, documents and instruments
as we have deemed necessary as a basis for the opinion hereafter expressed. In
such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the original documents of all documents submitted to us as copies. We have
also relied, to the extent we deem such reliance proper, upon information
supplied by officers and employees of the Company with respect to various
factual matters material to our opinion.
Based upon the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares have
been duly authorized, and that such Shares of Common Stock will, when issued in
accordance with the terms of the Plan, be legally issued, fully paid and
nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
ANDREWS & KURTH LLP
1198/2325/2647/jhc
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 23, 1996 appearing on page 31
of Santa Fe Energy Resources, Inc. Annual Report on Form 10-K for the year ended
December 31, 1995. We also consent to the incorporation by reference in the
Registration Statement of our report dated May 29, 1996 appearing on page 4 of
the Annual Report of the Santa Fe Energy Resources, Inc. Savings Investment Plan
on Form 11-K for the year ended December 31, 1995.
PRICE WATERHOUSE LLP
Houston, Texas
July 9, 1996
Exhibit 23.2
CONSENT OF EXPERTS
As petroleum engineers, we hereby consent to the incorporation
by reference in this registration statement on Form S-8 of our report included
in the Santa Fe Energy Resources, Inc. Annual Report on Form 10-K for the year
ended December 31, 1995.
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
July 9, 1996
SANTA FE ENERGY RESOURCES
SAVINGS INVESTMENT PLAN
(EIGHTH AMENDMENT)
<PAGE>
TABLE OF CONTENTS
PAGE
NO.
Section I Preamble ........................................ I-1
Section II Definitions ..................................... II-1
Section III Employee Eligible to Participate ................ III-1
Section IV Contributions ................................... IV-1
Section V Investment of Contributions ..................... V-1
Section VI Vesting ......................................... VI-1
Section VII Withdrawals Prior to Termination of Employment .. VII-1
Section VIII Distributions Other Than Withdrawals ............ VIII-1
Section IX Death Benefits, Beneficiaries, Unclaimed Benefits IX-1
Section X Administration .................................. X-1
Section XI Provisions Respecting the Company ............... XI-1
Section XII Termination of Plan ............................. XII-1
Section XIII Miscellaneous Provisions ........................ XIII-1
Section XIV Loans ........................................... XIV-1
Attachment A Investment Funds
(i)
SECTION I
PREAMBLE
1.1 Santa Fe Energy Resources, Inc. (the "Company")
established the Santa Fe Energy Resources Savings Investment Plan (the "Plan")
effective as of November 1, 1990.
1.2 The effective date of the Plan for each Participating
Company shall be the date so specified in the resolution of that company which
adopts the Plan.
1.3 As provided in the Employee Benefits Spinoff Agreement
between the Company and Santa Fe Pacific Corporation ("SFP"), the accounts under
The Santa Fe Pacific Retirement and Savings Plan for Salaried Employees (the
"SFP Plan") of all employees of the Company and each original Participating
Company hereunder were spun off and transferred to this Plan on November 1, 1990
(the "Transferred SFP Plan Accounts").
1.4 The Plan is hereby amended and restated effective as of
April 1, 1996, except as may otherwise be provided herein.
I-1
SECTION II
DEFINITIONS
When used in this Plan, the following terms shall have the
meanings set forth below unless a different meaning is plainly required by the
context:
2.1 "Accounts" shall mean a Participant's Deferred
Contributions Account, Employer Contributions Account, Rollover Account, and/or
Participant Contributions Account, if any.
2.2 "Affiliated Company" shall mean every corporation
(including the Company) which is a member of a controlled group of corporations
(within the meaning of Section 414(b) of the Code), which includes the Company.
"Affiliated Company" shall also mean any trade or business under common control
with an Affiliated Company within the meaning of Section 414(c) of the Code, and
any other entity required to be aggregated with the Company pursuant to Section
414(m) or (o) of the Code. For purposes of Section 4.8, the modification of
Sections 414(b) and 414(c) of the Code by Section 415(h) of the Code is
incorporated.
2.3 "Annuity Starting Date" shall mean the first day of the
first period for which an amount is payable as an annuity, or in the case of a
benefit not payable in the form of an annuity, the first day on which all events
have occurred which entitle the Participant to such benefit.
2.4 "Beneficiary" shall mean any individual, trust or other
recipient entitled to receive benefits payable hereunder upon the death of the
Participant, as provided in Section 9.2 hereof.
2.5 "Break in Service" shall mean a 12 consecutive month
period during which an Employee remains unemployed by the Affiliated Companies,
which period shall commence with
II-1
the date on which such Employee's employment with the Affiliated Companies is
terminated. The date on which employment is terminated shall be the earlier of
(1) the date on which the Employee quits, is discharged, retires or dies, or (2)
the first anniversary of the date on which a Leave of Absence commences;
provided, however, if an Employee is absent from service for more than 12 months
due to her pregnancy, birth or adoption of his or her child or the caring for
such child following its birth or adoption, the 12-month period following the
first anniversary of the date such absence began shall not be treated as a
period of absence for Break in Service purposes. The Employee may be required to
furnish proof of the reason and duration of the absence. The Plan shall be
administered in accordance with the requirements of the Family Medical Leave Act
of 1993.
2.6 "Code" shall mean the Internal Revenue Code of 1986, as
amended.
2.7 "Compensation" shall mean the total of base salary or base
wages paid to aParticipant by a Participating Company, and any elective pre-tax
salary deferrals made by the Participant with respect to the same under this
Plan and any plan which meets the requirements of Sections 125 and/or 129 of the
Code, and shall exclude all other items of compensation including but not
limited to, overtime, bonuses, severance benefits, payments while on a leave of
absence other than for short-term illness, unused vacation pay, business expense
reimbursements, any income realized for federal income tax purposes as a result
of group life insurance, other employee benefit plans or the grant or exercise
of an option to acquire stock, payments made under any long-term disability plan
of a Participating Company, restricted stock, phantom units and amounts deferred
under a non-qualified salary deferral plan. Compensation shall be determined in
accordance with the rules of Section 414(q) of the Code, except that the term
"family" shall include only the
II-2
Participant's spouse and any lineal descendants who have not attained the age of
19 before the close of the Plan Year.
For purposes of determining the Average Contribution
Percentage, however, Compensation shall mean the Employee's total pay from the
Participating Companies for purposes of Section 415 of the Code, plus any
elective deferrals excluded from his gross income pursuant to Sections 125, 129
or 402(g) of the Code.
Notwithstanding anything herein to the contrary, the amount of
annual compensation deemed to be "Compensation" with respect to any particular
Participant shall not in any event exceed $150,000 during any Plan Year, subject
to cost-of-living adjustments made thereto by the Secretary of the Treasury or
his delegate.
2.8 "Computation Period" means a period of 12 consecutive
months commencing on the date on which the Employee first completes (or,
following a Break in Service, again completes) an Hour of Service, and each
anniversary of such date.
2.9 "Deferred Contributions" shall mean contributions made on
behalf of a Participant pursuant to his election pursuant to Section 4.1 hereof.
2.10 "Deferred Contributions Account" shall mean that portion
of a Participant's interest in this Plan which is attributable to Deferred
Contributions made on his behalf hereunder and, if applicable, his SFP Plan
Deferred Contributions Account transferred to this Plan.
2.11 "Early Retirement" shall mean retirement prior to the
Participant's Normal Retirement Date pursuant to the terms of any qualified
retirement plan maintained by an Affiliated Company.
II-3
2.12 "Eligible Class" shall mean an Employee of a
Participating Company other than (1) a nonresident alien with no U.S. source
income, (2) a "leased employee" within the meaning of Section 414(n) of the
Code, (3) an Employee who is included in a bargaining unit that has a collective
bargaining agreement with the Participating Company, unless the agreement
provides for participating in the Plan by an Employee in such unit, or (4) an
hourly paid Employee.
In addition, a U. S. citizen or resident employed by a foreign
affiliate of the Company with respect to which the Company has entered into an
agreement with the Internal Revenue Service pursuant to Section 3121(l) of the
Code (a "Covered Foreign Affiliate") shall be deemed to be in the Eligible Class
(and shall be treated as an Employee of the Company) during the period he
remains continuously employed by a Covered Foreign Affiliate, provided he was a
Participant in the Eligible Class immediately prior to his employment with the
Covered Foreign Affiliate or he is employed in a classification or position with
a Covered Foreign Affiliate that has been designated in writing as being in the
Eligible Class by the Plan Administrator, and provided further, that (1) no
contributions under a funded plan of deferred compensation are made by any
person other than the Company with respect to the remuneration paid to the
employee by such Covered Foreign Affiliate and (2) such period of deemed
Eligible Class employment shall not cover any period of employment during which
the Section 3121(l) agreement with the Internal Revenue Service is not in
effect.
2.13 "Employee" shall mean any person whose wages from an
Affiliated Company are subject to withholding under Section 3402 of the Code,
and shall also include any "leased employee" within the meaning of Section
414(n) of the Code, except as otherwise permitted by the Code and regulations.
II-4
2.14 "Employer" shall mean a Participating Company, or any
successor organization which shall assume the obligations of this Plan with
respect to its Employees.
2.15 "Employer Contributions Account" shall mean that portion
of a Participant's interest in this Plan which is attributable to Employer
contributions made at any time hereunder, other than Deferred Contributions made
on his behalf pursuant Section 4.1 hereof, and, if applicable, shall include his
SFP Plan Employer Contributions Account transferred to this Plan.
2.16 "Entry Date" shall mean the first day of each month.
2.17 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
2.18 "Highly Compensated Employee" shall mean any Employee who
performs service for the Employer or an Affiliated Company during the
determination year and who, during the look-back year: (i) received compensation
from the Employer or an Affiliated Company in excess of $75,000 (as adjusted
pursuant to section 415(d) of the Code); (ii) received compensation from the
Employer or an Affiliated Company in excess of $50,000 (as adjusted pursuant to
section 415(d) of the Code) and was a member of the top-paid group for such
year; or (iii) was an officer of the Employer or an Affiliated Company and
received compensation during such year that is greater than 50% of the dollar
limitation in effect under section 415(d)(1)(A) of the Code. The term highly
compensated employee also includes: (i) employees who are both described in the
preceding sentence if the term 'determination year' is substituted for the term
'look-back year' and the employee is one of the 100 employees who received the
most compensation from the employer during the determination year; and (ii)
employees who are 5% owners at any time during the look- back year or
determination year.
II-5
If no officer has satisfied the compensation requirement of
(iii) above during either a determination year or look-back year, the highest
paid officer for such year shall be treated as a highly compensated employee.
For this purpose, the determination year shall be the plan
year. The look-back year shall be the twelve-month period immediately preceding
the determination year.
A highly compensated former employee includes any employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the employer during the
determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the employee's 55th
birthday.
If an Employee is, during a determination year or look-back
year, a family member of either a 5 percent owner who is an active or former
employee or a highly compensated employee who is one of the 10 most highly
compensated employees ranked on the basis of compensation paid by the Employer
or an Affiliated Company during such year, then the family member and the 5
percent owner or top-ten highly compensated employee shall be aggregated. In
such case, the family member and 5 percent owner or top-ten highly compensated
employee shall be treated as a single employee receiving compensation and plan
contributions or benefits equal to the sum of such compensation and
contributions or benefits of the family member and 5 percent owner or top-ten
highly compensated employee. For purposes of this section, family member
includes the spouse, lineal ascendants and descendants.
The determination of who is a highly compensated employee,
including the determinations of the number and identity of employees in the
top-paid group, the top 100
HOU03:53762.1
II-6
<PAGE>
employees, the number of employees treated as officers and the compensation that
is considered, will be made in accordance with section 414(q) of the Code and
the regulations thereunder.
2.19 "Hours of Service" shall mean each hour for which an
Employee is paid, or entitled to payment, for the performance of duties for an
Affiliated Company.
2.20 "Named Fiduciary" shall mean the Plan Administrator.
2.21 "Normal Retirement Date" shall mean the Valuation Date on
or next following a Participant's 65th birthday (the "Normal Retirement Age").
2.22 "Participant" shall mean an Employee who meets the
eligibility requirements set forth in Section III hereof and who has taken all
of the steps required for participation by said Section III and a former
Employee who has an Account under the Plan. Participant shall also include an
Employee who makes a rollover contribution to the Plan pursuant to Section 4.2.
2.23 "Participant Contributions Account" shall mean, if
applicable, that portion of a Participant's interest in this Plan which is
attributable to his SFP Plan Participant Contributions Account transferred to
this Plan. Any portion thereof attributable to Participant after-tax
contributions made prior to 1987 shall be separately accounted for under the
Account.
2.24 "Participating Company" shall mean each Affiliated
Company which has adopted this Plan pursuant to Section XIII.
2.25 "Plan" shall mean the Santa Fe Energy Resources Savings
Investment Plan as set forth herein and all subsequent amendments thereto.
2.26 "Plan Administrator" shall mean the Employee Benefits
Committee of at least three persons appointed by the President of the Company to
serve as Plan Administrator.
II-7
2.27 "Plan Year" shall mean the calendar year, which shall
also be the limitation year for purposes of Section 415 of the Code.
2.28 "Qualified Joint and Survivor Annuity" shall mean an
immediate annuity for the life of the Participant with a survivor annuity of 50%
for the life of his spouse, as his contingent annuitant, as described in Option
2 in Section 8.1.
2.29 "Retirement" shall mean a Participant terminates his
employment with all Affiliated Companies at a time when he is eligible to
commence receiving a vested annuity benefit under any qualified defined benefit
plan maintained by an Affiliated Company.
2.30 "Rollover Account" shall mean that portion of a
Participant's interest in this Plan which is attributable to a qualified
rollover contribution (within the meaning of Section 402 of the Code) made to
the Plan by the Participant.
2.31 "Total Disability" shall mean a Participant's eligibility
for benefits under the Company's Long-Term Disability Plan. Total Disability
shall be deemed to exist only when a written application has been filed with the
Employer or its designee by or on behalf of such Participant and when such Total
Disability is certified to the Employer or its designee by a licensed physician
approved by the Employer or his designee.
2.32 "Trustee" shall mean the trustee under any trust
agreement established between the Company and the Trustee for the purpose of
holding assets of the Plan.
2.33 "Valuation Date" shall mean each business day of the Plan
Year.
2.34 "Year of Service" shall mean a Computation Period during
which an Employee is employed or deemed to be employed by an Affiliated Company
for the full Computation Period; provided, however, if a termination of
employment of such Employee shall
II-8
occur, followed by the completion of an Hour of Service prior to incurring a
Break in Service, then the period commencing with such termination of employment
and extending to the date he again completes an Hour of Service shall be
credited for determining the Employee's Years of Service; provided further,
however, if an Employee is absent from service due to her pregnancy, birth or
adoption of his or her child or the caring for such child following its birth or
adoption, the Employee shall be credited with the period of such
maternity/paternity absence but not in excess of 12 months. The Employee may be
required to furnish proof of the reason and duration of such absence.
All Years of Service (and fractional parts thereof), whether
or not continuous, shall be aggregated on the basis that 365 days of service
equals one full Year of Service; provided, however, any Years of Service (or
parts thereof) completed prior to becoming vested shall be disregarded if the
Employee incurs five or more consecutive Breaks in Service.
Each Employee's service prior to the effective date of the
Plan shall be the amount shown by the Employer's records (or the SFP Plan) as of
that date. Further, prior service with a predecessor employer or an acquired
business before the date such entity or business became an Affiliated Company
shall not be credited under the Plan except to the extent the President of the
Company provides otherwise in a nondiscriminatory manner.
The singular form of any word shall include the plural and the
masculine gender shall include the feminine wherever necessary for the proper
interpretation of this Plan.
II-9
SECTION III
EMPLOYEES ELIGIBLE TO PARTICIPATE
3.1 Each Employee or former Employee who is a Participant on
the effective date of this Plan amendment shall continue as a Participant as of
that date. Each other Employee or future Employee of a Participating Company
shall be eligible to become a Participant as of the first Entry Date on or
immediately following the date he completes an Hour of Service, or on any
subsequent Entry Date, provided he is in the Eligible Class on such Entry Date.
3.2 In the event a former Employee is rehired and again
becomes a member of the Eligible Class, or an Employee transfers into the
Eligible Class, he shall be eligible to participate in the Plan as of his date
of rehire or transfer into the Eligible Class, as the case may be, or as of any
future Entry Date thereafter, provided he is in the Eligible Class on such
future Entry Date.
3.3 Participating Companies shall notify all Employees in the
Eligible Class of their eligibility to participate and shall give them an
opportunity to become Participants.
3.4 To become a Participant, an Employee must meet the above
requirements of this Section and execute and deliver to the Participating
Company in accordance with procedures established by the Plan Administrator a
written election form indicating his desire to have a portion of his
Compensation contributed to the Plan as Deferred Contributions. He must specify
his chosen rate of Deferred Contributions and authorize the Participating
Company to make regular payroll reductions of such Deferred Contributions. In
addition, the Employee must make an investment election as described in Section
V hereof. No Employee shall become a Participant until he has met the above
requirements. Elections shall be processed by the Participating Companies, in
accordance
III-1
with procedures established by the Plan Administrator, as soon as reasonably
practicable after their receipt.
III-2
SECTION IV
CONTRIBUTIONS
4.1 Each Employee who is eligible to participate in the Plan
must, in order to participate, elect to have his Compensation reduced each
payroll period by either (x) a whole percentage (not to exceed 12%) or (y) a
dollar amount equal to the maximum dollar amount permitted by Section 402(g) of
the Code for such Plan Year divided by the number of payroll periods in the Plan
Year (or, upon a Participant's initial participation following his date of hire
or rehire, the number of payroll periods remaining in the Plan Year), but not to
exceed 12% of Compensation, and to have the amount by which his Compensation is
reduced contributed to the Plan by his Employer on his behalf as before-tax
Deferred Contributions. No contributions may be made by a Participant unless he
is in the Eligible Class.
4.2 An Employee who is in the Eligible Class but elects not to
make contributions pursuant to Section 4.1 shall be eligible to make a rollover
contribution (including in the form of a "direct" rollover) to the Plan by wire
transfer or by check acceptable to the Plan Adminstrator, provided such
contribution satisfies the requirements of Section 402(a) of the Code as being a
'qualified rollover,' and the Employee satisfies such other administrative
requirements concerning such rollover contributions as may be required,
including designating the investment fund(s) for such contribution. Rollover
contributions are not subject to a Company matching contribution.
4.3 Election forms shall be distributed by the Plan
Administrator to all eligible Employees. All elections shall apply to
Compensation to be received after the election becomes effective. Any eligible
Employee who fails to return a properly completed election form in a timely
IV-1
manner to the Plan Administrator shall be deemed to have elected to have all of
his Compensation included in his regular paycheck.
4.4 Participant Deferred Contributions shall be made by means
of payroll reductions and the amounts so withheld shall be paid as soon as
reasonably practicable without interest to the Trustee by the Participating
Companies and shall be credited to the Participant's Deferred Contributions
Account.
4.5 The Participating Companies shall make matching Employer
contributions to the Trustee hereunder on or as soon as reasonably practicable
following the end of each pay period in regard to their Participants which shall
be credited to the Participants' Employer Contributions Accounts. The amount of
the matching Employer contribution to be made for any particular pay period with
respect to any particular Participant shall be equal to 100% of the Deferred
Contributions, up to 4% of his Compensation, actually made hereunder on behalf
of such Participant for that pay period.
In addition, the Company may, with respect to any Plan Year,
determine that an additional matching contribution (the "Employer Performance
Match Contribution") shall be made as of the end of such Plan Year to those
Participants who are Employees at the end of the Plan Year (the requirement that
a Participant be an Employee at year end shall be waived for any Plan Year in
which such requirement would cause the Plan to fail the discrimination tests of
Section 401(a)(4) of the Code). The amount of such Employer Performance Match
Contribution made with respect to any Participant shall equal the Bonus
Percentage for such Plan Year multiplied by the aggregate of the Employer
matching contributions (as described in the immediately preceding paragraph)
made with respect to such Participant for such Plan Year, with the Bonus
Percentage being established by
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the Plan Administrator, in its discretion, on a uniform basis for all affected
Participants, but in no event shall the Bonus Percentage for any Plan Year
exceed 50%.
The Plan is intended to qualify as a profit sharing plan under
Section 401(a) of the Code; however, unless the Board directs, with respect to
any Plan Year, that contributions shall not be made in the absence of profits,
the above described contributions shall be made by the Employer in the absence
of current or accumulated earnings and profits provided the Plan will continue
to qualify as a profit sharing plan under Section 401(a)(27) of the Code. The
Employer matching contribution may be made in cash, Company Stock or any
contribution thereof as determined by the Company.
4.6 The Participant may elect to change his rate of Deferred
Contributions as of any payroll period (such changes shall be limited to those
percentages or amount described in Section 4.1) and may elect to suspend his
Deferred Contributions entirely as of any payroll period with each such
suspension being for three months. The Participant's election to suspend or
change his rate of contributions must be made by notice to the Participating
Company in the manner established by the Plan Administrator prior to the
processing cut-off date for such payroll period. If received after the cut-off
date, the election shall be processed by the Participating Company as soon as
reasonably practicable thereafter.
4.7 If the Participant elects to suspend his contributions, he
may elect to resume Deferred Contributions as of any payroll period that is
three or more months after the effective date of such suspension. An election to
resume contributions must notify the Participating Company and/or the
Administrator and such request will be processed as soon as reasonably
practicable after its receipt.
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4.8 I. EXCESS DEFERRALS.
(a) A Participant's Deferred Contributions shall in no event
exceed $9,500 for the 1996 taxable year of the Participant. This dollar
limitation shall be adjusted annually for years after 1996 as provided
in Code Section 415(d) pursuant to regulations. The adjusted limitation
shall be effective as of January 1 of each calendar year.
(b) In the event that the dollar limitation provided for in
(a) is exceeded, the Plan Administrator shall direct the Trustee to
distribute such excess amount, and any income (or loss) allocable to
such amount (as provided in (d) below), to the Participant not later
than the first April 15 following the close of the Participant's
taxable year.
(c) In the event that a Participant is also a participant in
(1) another qualified cash or deferred arrangement (as defined in Code
Section 401(k)), (2) a simplified employee pension (as defined in Code
Section 408(k)), or (3) a salary reduction arrangement (within the
meaning of Code Section 3121(a)(5)(D)) and the elective deferrals, as
defined in Code Section 402(g)(3), made under such other arrangement(s)
and this Plan cumulatively exceed $9,500 (or such amount adjusted
annually as provided in Code Section 415(d) pursuant to regulations)
for such Participant's taxable year, the Participant may, not later
than March 1 following the close of his taxable year, notify the Plan
Administrator in writing of such excess and request that his 401(k)
contributions under this Plan be reduced by an amount specified by the
Participant. Such amount shall then be distributed in the same manner
as provided in (b).
(d) The income (or loss) allocable to returnable excess
deferrals for a Plan Year shall be determined by the Plan Administrator
in a reasonable manner and need not include
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any gain or loss for the period between the end of the Plan Year and
the date of distribution. Income includes all earnings and
appreciation, including such items as interest, dividends, rent,
royalties, gains from the sale of property, appreciation in the value
of stocks, bonds, annuity and life insurance contracts, and other
property, without regard to whether such appreciation has been
realized.
Unless the Plan Administrator elects otherwise for a Plan
Year, the income (or loss) allocable to returnable contributions for
the Plan Year shall be determined by multiplying the income (or loss)
for the Plan Year allocable to employee contributions, matching
contributions, and amounts treated as matching contributions (whichever
is applicable) by a fraction. The numerator of the fraction shall be
the amount of returnable contributions made on behalf of the employee
for the Plan Year. The denominator of the fraction shall be the total
account balance of the employee attributable to employee contributions,
matching contributions and amounts treated as matching contributions as
of the end of the Plan Year, reduced by the gain allocable to such
total amount for the Plan Year and increased by the loss allocable to
such total amount for the Plan Year.
II. ACTUAL DEFERRAL PERCENTAGE.
For purposes of this Section, Actual Deferral Percentage
("ADP") means, with respect to the Highly Compensated Employee group and
Non-Highly Compensated Employee group for a Plan Year, the average of the
ratios, calculated separately for each member in such group, of the amount of
Deferred Contributions allocated to each Participant's Deferred Contribution
Account (unreduced by distributions made pursuant to I(b) and (d) above) for
such Plan Year, to such Participant's ss.415 Compensation for such Plan Year. In
the case of a Highly Compensated
IV-5
Employee who is either a 5% owner or one of the ten most highly compensated
employees, the ADP for the Family Member group (which is treated as one Highly
Compensated Employee) is the ADP determined by combining the elective
contributions, compensation and amounts treated as elective contributions of all
eligible Family Members. Except to the extent taken into account in the
preceding sentence, the contributions, compensation and amounts treated as
elective contributions of all Family Members are disregarded in determining the
ADP for the groups of Highly Compensated Employees and Non-Highly Compensated
Employees.
In the case of a Highly Compensated Employee whose ADP is
determined under the family aggregation rules, the ADP is reduced in accordance
with the "leveling" method described in the regulations and the excess
contributions for the family unit are allocated among the Family Members in
proportion to the contributions of each Family Member that have been combined.
For purposes of this Section 4.3, a Family Member is an Employee's spouse,
lineal ascendants or descendants or a spouse of such lineal ascendant or
descendent.
III. ACTUAL DEFERRAL PERCENTAGE TEST.
(a) Maximum Annual Allocation: For each Plan Year, the annual
allocation derived from Deferred Contributions to a Participant's
Deferred Contribution Account shall satisfy one of the following tests:
(1) The ADP for the Highly Compensated Employee group
shall not be more than the ADP of the Non-Highly Compensated
Employee group multiplied by 1.25, or
(2) The excess of the ADP for the Highly Compensated
Employee group over the ADP for the Non-Highly Compensated
Employee group shall not be more
IV-6
than two percentage points. Additionally, the ADP for the
Highly Compensated Employee group shall not exceed the ADP for
the Non-Highly Compensated Employee group multiplied by two.
This alternative limitation test cannot be used to satisfy the
ADP test and the Actual Contribution Percentage test set forth
below except as otherwise provided by Treasury Regulation
ss.1.401(m)-2(b), the provisions of which are hereby
incorporated by reference. (b) For the purposes of Sections
II(a) and III, a Highly Compensated Employee
and a Non-Highly Compensated Employee shall include any Employee
eligible to make a Deferred Contribution, whether or not such
contribution was made.
(c) For the purposes of this Section, if two or more plans
which include cash or deferred arrangements are considered one plan for
the purposes of Code Section 401(a)(4) or 410(b), the cash or deferred
arrangements included in such plans shall be treated as one
arrangement. The aggregated plans must also satisfy Code Sections
401(a)(4) and 410(b) as though they were a single plan.
(d) For purposes of this Section, if a Highly Compensated
Employee is a member under two or more cash or deferred arrangements of
the Employer, all such cash or deferred arrangements (other than those
that may not be permissively aggregated as a single arrangement) shall
be treated as one cash or deferred arrangement for the purpose of
determining the deferral percentage with respect to such Highly
Compensated Employee.
IV-7
IV. ADJUSTMENTS AS A RESULT OF ACTUAL DEFERRAL PERCENTAGE
TEST.
The amount of excess contributions for a Highly Compensated
Participant will be determined in the following manner: First, the actual
deferral ratio (ADR) of the Highly Compensated Participant with the highest ADR
is reduced to the extent the ADR of the Highly Compensated Participant with the
next highest ADR is reduced to the extent necessary to satisfy the actual
deferral percentage (ADP) test or cause such ratio to equal the ADR of the
Highly Compensated Participant with the next highest ratio. Second, this process
is repeated until the ADP test is satisfied. The amount of excess contributions
for a Highly Compensated Participant is then equal to the total of elective and
other contributions taken into account for the ADP test minus the product of the
employee's reduced deferral ratio as determined above and the employee's
compensation. In the case of a Highly Compensated Participant whose ADR is
determined under the family aggregation rules, the determination of the amount
of excess contributions shall be made as follows: The ADR is reduced in
accordance with the "leveling" method described above and the excess
contributions are allocated among the Family Members in proportion to the
contributions of each Family Member that have been combined.
The amount of excess contributions to be distributed shall be
reduced by excess deferrals previously distributed for the taxable year ending
in the same plan year and excess deferrals to be distributed for a taxable year
will be reduced by excess contributions previously distributed for the plan year
beginning in such taxable year. The distribution of excess contributions will
include the income allocable thereto. The income allocable to excess
contributions includes only income for the plan year for which the excess
contributions were made. Such correction shall be made on
IV-8
or before the 15th day of the third month following the end of the Plan Year,
but in no event later than the close of the following Plan Year.
Nonelective contributions and Employer matching contributions
may be treated as elective contributions for purposes of the ADP test only if
(i) such contributions are nonforfeitable when made and are subject to the same
distribution restrictions that apply to elective contributions, (ii) nonelective
contributions and Employer matching contributions which may be treated as
elective contributions must satisfy these requirements without regard to whether
they are actually taken into account as elective contributions, (iii) the amount
of nonelective contributions, including those qualified nonelective
contributions treated as elective contributions for purposes of the actual
deferral percentage test, satisfies the requirements of section 401(a)(4), (iv)
the amount of nonelective contributions treated as elective contributions for
purposes of the actual deferral percentage test and those qualified nonelective
contributions treated as matching contributions for purposes of the actual
contribution percentage test, satisfies the requirement of section 401(a)(4),
and (v) the elective contribution is allocated to the employees's account as of
a date within that Plan Year, and (vi) the plan that includes the cash or
deferred arrangement and the plan or plans to which the qualified nonelective
contributions and qualified matching contributions are made, could be aggregated
for purposes of section 410(b) (other than the average benefit percentage test).
In lieu of a corrective distribution, the Employer may make a
special contribution to the Employer Accounts of one or more groups of
Non-Highly Compensated Employees in a manner sufficient to satisfy one of the
tests set forth in Section III(a). Such contribution shall be fully vested,
separately accounted for and subject to the same restrictions on withdrawal as
apply to Deferred
IV-9
Contributions, but no in-service hardship withdrawal shall be permitted with
respect to any such contribution.
V. MAXIMUM ACTUAL CONTRIBUTION PERCENTAGE.
(a) The Actual Contribution Percentage ("ACP") for the Highly
Compensated Employee group shall not exceed the greater of:
(1) 125% of such percentage for the Non-Highly
Compensated Employee group; or
(2) the lesser of 200% of such percentage for the
Non-Highly Compensated Employee group, or such percentage for
the Non-Highly Compensated Employee group plus two percentage
points.
(b) For the purposes of this Section V and Section VI, ACP for
a Plan Year means, with respect to the Highly Compensated Employee
group and Non-Highly Compensated Employee group, the average of the
ratios (calculated separately for each member in each group) of:
(1) the sum of the Employer matching contributions
contributed (and any employee after-tax contributions) under
the Plan on behalf of each such member for such Plan Year; to
(2) the Participant's ss.415 Compensation for such
Plan Year.
(c) In the case of a Highly Compensated Employee who is either
a 5% owner or one of the ten most highly compensated employees, the
actual contribution ratio (ACR) for the family group (which is treated
as one Highly Compensated Employee) is the ACR determined by combining
the contributions and compensation of all eligible Family
IV-10
Members. Except to the extent taken into account in the preceding
sentence, the contributions, compensation of all Family Members are
disregarded in determining the actual contribution percentages for the
groups of Highly Compensated Employees and Non-Highly Compensated
Employees. In all cases the determination and treatment of the ACP of
any participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(d) For purposes of this Section, if two or more plans of the
Employer to which matching contributions, Employee contributions, or
elective deferrals are made are treated as one plan for purposes of
Code Section 410(b), such plans shall be treated as one plan for
purposes of this Section. In addition, if a Highly Compensated Employee
participates in two or more plans described in Code Section 401(a) or
arrangements described in Code Section 401(k) which are maintained by
the Employer to which such contributions are made, all such
contributions shall be aggregated for purposes of this Section.
(e) For purposes hereof, Highly Compensated Employee and
Non-Highly Compensated Employee shall include any Employee eligible to
have matching contributions allocated to his account for the Plan Year.
VI. ADJUSTMENTS FOR EXCESSIVE ACP.
(a) In the event that the ACP for the Highly Compensated
Employee group exceeds the ACP for the Non-Highly Compensated Employee
group pursuant to Section V(a), the Plan Administrator (on or before
the 15th day of the third month following the end of the Plan Year, but
in no event later than the close of the following Plan Year) shall
direct the Trustee to proportionately distribute to the Highly
Compensated Employee group the
IV-11
vested amount of "Excess Aggregate Contributions" (and any income
allocable to such contributions as provided in (d) of Section I and
forfeit such "Excess Aggregate Contributions" that are not vested
(including income or loss as determined under Section I). Employer
contributions and employee after-tax contributions shall be returned
pro rata as necessary to satisfy this Section. Such distribution or
forfeiture shall be made on behalf of the Highly Compensated Employee
group in the order of their ACP beginning with the highest of such
percentages. Forfeitures of "Excess Aggregate Contributions" shall not
be allocated to a Highly Compensated Employee whose contributions are
reduced pursuant to this Section.
In lieu of a corrective distribution, the Company may make a
special contribution to the Deferred Contribution Accounts of one or
more groups of Non-Highly Compensated Employees in a manner sufficient
to satisfy one of the tests set forth in Section V(a). Such
contribution shall be fully vested and subject to the same restrictions
on withdrawal as apply to Participant Deferred Contributions but may
not be withdrawn under the hardship rules.
(b) For the purposes of this Section, "Excess Aggregate
Contributions" means, with respect to any Plan Year, the excess of:
(1) the aggregate amount of contributions pursuant to
Sections VI(b)(1) and VI(c) actually made on behalf of the
Highly Compensated Employee group for such Plan Year, over
(2) the maximum amount of such contributions
permitted under the limitations of Section VI(a).
IV-12
(c) The amount of excess aggregate contributions for a highly
compensated employee under the Plan will be determined in the following
manner: First, the actual contribution ratio (ACR) of the highly
compensated employee with the highest ACR is reduced to the extent
necessary to satisfy the actual contribution percentage (ACP) test or
cause such ratio to equal the ACR of the highly compensated employee
with the next highest ratio. Second this process if repeated until the
ACP test is satisfied. The amount of excess aggregate contributions for
a highly compensated employee is then equal to the total of employee,
matching and other contributions taken into account for the ACP test
minus the product of the employee's contribution ratio as determined
above and the employee's compensation.
In the case of a highly compensated employee whose ACR is
determined under the family aggregation rules, the determination of the
amount of excess aggregate contributions shall be made as follows: the
ACR is reduced is accordance with the "leveling" method described above
and the excess aggregate contributions are allocated among the family
members in proportion to the contributions of each family member that
have been combined.
In the case of a highly compensated employee who is either a
5% owner or one of the ten most highly compensated employees and is
thereby subject to the family aggregation rules, the actual
contribution ratio (ACR) for the family group (which is treated as one
highly compensated employee) is the ACR determined by combining the
contributions and compensation of all eligible family members. Except
to the extent taken into account in the preceding sentence, the
contributions and compensation of all family members are
IV-13
disregarded in determining the actual contribution percentages for the
groups of highly compensated employees and nonhighly compensated
employees.
The amount of excess aggregate contributions for a plan year
shall be determined only after first determining the excess
contributions that are treated as employee contributions due to
recharacterization.
(d) Notwithstanding anything in the Plan to the contrary, an
employer matching contribution may be distributed only if such
contribution is an excess aggregate contribution. It may not be
distributed merely because it relates to an excess deferral, an excess
contribution or an excess aggregate contribution that is distributed.
In such cases, when an election contribution is distributed is meet the
requirements of Code Section 401(k) the related matching contribution
shall be forfeited notwithstanding anything in the Plan to the
contrary.
To prevent the multiple use of the alternative methods of
compliance with the ADP test and the ACP test, the provision of section
1.401(m)-2 of the regulations are hereby incorporated by reference to
determine if such multiple use exists. If, after the applicable of such
test, multiple use exists, the actual contributions percentage shall be
reduced as provided in section 1.401(m)-2(c) of the regulations for all
highly compensated employees in the Plan.
If the Plan Administrator determines that the limitations set
forth in this section (with or without restructuring) would be exceeded for the
Plan Year, then the Plan Administrator shall reduce to the Limitation Percentage
described in the foregoing table the percentage amount of Deferred Contributions
(or the total percentage amount of Employer matching contributions) of each
IV-14
eligible Highly Compensated Employee whose Deferred Contribution percentage is
more than the Limitation Percentage (or whose Employer matching contribution
percentage gives rise to a percentage in excess of the Limitation Percentage).
The Plan Administrator shall have the authority to establish a lower Limitation
Percentage if, in the discretion of the Plan Administrator, this would be
beneficial to the Plan by ensuring compliance with the safe-harbor provisions of
Sections 401(k)(3)(A) and 401(m)(2) of the Code. The reduced percentage for each
such Highly Compensated Employee shall be substituted for his actual elected
percentage and shall represent the percentage of his Compensation that shall be
paid into the Plan on his behalf. The amount of any reduction which is necessary
shall be included in the Participant's regular paycheck.
Notwithstanding the foregoing, in the event the Actual
Contribution Percentage is not satisfied at year-end, the Plan Administrator (on
or before the 15th day of the third month following the end of the Plan Year,
but in no event later than the close of the following Plan Year) shall direct
the Trustee to distribute to the Highly Compensated Employee group (or forfeit,
if nonvested), beginning with the Highly Compensated Employee with the highest
Average Contribution Percentage, the amount of "Excess Deferred Contributions",
as described in Section 401(k)(8)(B) of the Code, and/or "Excess Aggregate
Contributions", as described in Section 401(m)(6)(B) of the Code, as the case
may be, and any income (or loss) allocable to such excess contributions as
provided below, until the applicable test set forth above is met.
Excess Aggregate Contributions shall be distributed from the
Participant Deferred Contribution Account and the Participant's Employer
Contribution Account (unless otherwise forfeitable under the terms of the Plan,
in which event such amount shall be forfeited from the Employer Contribution
Account) in proportion to the Deferred Contributions and Employer
IV-15
Contributions allocated with respect to the Participant for the Plan Year.
Amounts of Employer Contributions forfeited by Highly Compensated Employees
under this Section 4.7 shall be treated as Annual Additions under Section 4.8 of
the Plan and applied to reduce future Employer Contributions otherwise to be
made under the Plan.
The income (or loss) allocable to such excess contributions
shall equal the sum of the allocable gain (or loss) for the Plan Year and the
allocable gain (or loss) for the period between the end of the Plan Year and the
date of distribution (or forfeiture) as determined below. Income includes all
earnings and appreciation, including such items as interest, dividends, rent,
royalties, gains from the sale of property, appreciation in the value of stocks,
bonds, annuity and life insurance contracts, and other property, without regard
to whether such appreciation has been realized.
(1) The income (or loss) allocable to returnable contributions
(or forfeitable Employer matching amounts) for the Plan Year is
determined by multiplying the income (or loss) for the Plan Year
allocable to Participant contributions and Employer matching
contributions by a fraction, the numerator of which is the amount of
returnable contributions (or forfeitable matching amounts) made on
behalf of the Participant for the Plan Year and the denominator of
which is the total account balance of the Participant attributable to
Participant contributions and Employer matching contributions as of the
end of the Plan Year, reduced by the gain allocable to such total
amount for the Plan Year and increased by the loss allocable to such
total amount for the Plan Year.
(2) The allocable income (or loss) for the period between the
end of the Plan Year and distribution date is equal to 10% of the
income (or loss) allocable to returnable contributions (or forfeitable
Employer matching amounts) for the Plan Year (as calculated
IV-16
under subparagraph (1) (above) multiplied by the number of calendar
months that have elapsed since the end of the Plan Year. For purposes
of determining the number of calendar months that have elapsed, a
distribution occurring on or before the fifteenth day of the month will
be treated as having been made on the last day of the preceding month,
and a distribution occurring after such fifteenth day will be treated
as having been made on the first day of the next month.
4.7 Notwithstanding anything contained herein to the contrary,
the total annual additions (as defined below) allocated to the Accounts of a
Participant for any Plan Year shall not exceed the lesser of (i) $30,000, or, if
greater, 1/4 of the dollar limitation in effect under Code Section 415(b)(1)(A),
or ((i) 25% of the Participant's ss.415 Compensation (as defined below). Annual
additions means the sum of the following amounts credited to a Participants
Accounts for the limitation year:
(a) employer contributions,
(b) employee contributions,
(c) forfeitures, and
(d) amounts allocated, after March 31, 1984, to an individual
medical account, as defined in section 415(1)(2) of the Code, which is
part of a pension or annuity plan maintained by the employer. Also
amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are attributable
to post-retirement medical benefits, allocated to the separate account
of a key employee, as defined in section 419A(d)(3) of the Code, under
a welfare benefit fund, as defined in section 419(e) of the Code,
maintained by the employer shall be treated as annual additional.
IV-17
ss.415 Compensation means wages, salaries, and fees for
professional services and other amounts received (without regard to whether or
not an amount is paid in cash) for personal services actually rendered by the
employee in the course of employment with the employer maintaining the plan to
the extent that the amounts are includable in gross income (including, but not
limited to, commissions paid salesmen, compensation for services on the basis of
a percentage of profits, commissions on insurance premiums, tips, bonuses,
fringe benefits, reimbursements, and expense allowances), and excluding the
following:
(a) employer contributions to a plan of deferred compensation
which are not includable in the employee's gross income for the taxable
year in which contributed, or employer contributions under a simplified
employee pension plan to the extent such contributions are deductible
by the employee, or any distributions from a plan of deferred
compensation;
(b) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property ) held by the
employee either becomes freely transferable or is no longer subject to
a substantial risk of forfeiture;
(c) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(d) other amounts which received special tax benefits, or
contributions made by the employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity described in
section 403(b) of the Internal Revenue Code (whether or not the amounts
are actually excludable from the gross income of the employee).
IV-18
For purposes of applying these limitations, compensation for a
limitation year is the compensation actually paid or includable in the
employee's gross income during such limitation year.
If, as a result of the allocation of forfeitures, a reasonable
error in estimating a Participant's compensation, a reasonable error in
determining the amount of 401(k) contributions that may be made by a
Participant, or such other facts and circumstances as the Commissioner approves,
the annual additions exceed the applicable limitations set forth above, the
unmatched 401(k) contributions of the Participant (plus any income thereon)
shall first be returned to the extent necessary, then the Employer contributions
for the Plan Year beginning first with matching contributions which cause the
excess (and the income thereon) shall be placed in a suspense account and used
to reduce Employer contributions for that Participant for the next Plan Year
(and succeeding Plan Years, as necessary) if that Participant is covered by the
Plan as of the end of the Plan Year. If the Participant is not covered by the
Plan as of the end of the Plan Year, the amount in the suspense account shall be
reallocated the next Plan Year to the remaining Participants as additional
Employer contributions, subject to the limits of this Section.
Notwithstanding the foregoing, contributions with respect to
any Participant may be further reduced to the extent necessary, as determined by
the Plan Administrator, to prevent disqualification of the Plan under Section
415 of the Code, which imposes additional limitations on the benefits payable to
Participants who also may be participating in another tax-qualified pension,
profit-sharing, savings or stock bonus plan maintained by an Affiliated Company.
If a Participant is at any time a participant in both a
defined benefit plan and a defined contribution plan maintained by an Affiliated
Company, the sum of the "defined benefit plan
IV-19
fraction" and the "defined contribution plan fraction" for any Plan Year may not
exceed 1.0 and, if necessary, the annual benefit of the defined benefit plan
will be reduced first so that the sum of the fractions will not exceed 1.0; in
no event will the annual benefit be decreased below the amount of the accrued
benefit to date. If additional reductions are required for the sum of the
fractions to equal 1.0, the reductions will then be made to the annual additions
(as defined in Section 415 of the Code) of the defined contribution plans. For
the purposes of applying the foregoing limitations, all defined benefit plans
and all defined contribution plans, whether or not terminated, of an Affiliated
Company are to be treated as one defined benefit plan and one defined
contribution plan, respectively; however, if defined contribution plans are
combined (or the combined limit is exceeded) and the annual addition is required
to be reduced, the annual addition to such other defined contribution plans
shall be reduced first.
Further, the provisions of Section 415 of the Code that may
not be applied in more than one manner are hereby incorporated by reference and
shall control over any provision in the Plan in conflict therewith.
IV-20
SECTION V
INVESTMENT OF CONTRIBUTIONS
5.1 For the purpose of investing contributions under this
Plan, the Company shall establish one or more trusts or enter into one or more
group annuity contracts with one or more insurers, or may establish a
combination of one or more trusts or insurance contracts. The Plan Administrator
shall have the responsibility for selecting the investment funds offered
hereunder and may, from time-to-time, select substitute funds, establish
additional funds, or delete funds for the purpose of investing amounts derived
from contributions hereunder. Until changed as provided above, contributions to
the Plan shall be invested in the Investment Funds on Attachment A to the Plan.
The Plan Administrator shall obtain descriptions of the
investment choices available for the purpose of informing Participants with
respect thereto. To the extent the Plan gives a Participant investment
discretion with respect to this Accounts, the selection of investment choices is
the sole responsibility of each Participant, and no Employee or representative
of the Company or any Participating Company is authorized to make any
recommendation to any Participant with respect to his investment choices. If
elected by the Participants, 100% of the Plan's assets may be invested in
Company Stock.
5.2 Prior to the date the Employee becomes a Participant
hereunder, he must make an investment election which will apply to the
investment of all his Deferred Contributions. If a Participant wishes to utilize
more than one Fund, he shall notify the Company in such manner established by
the Plan Administrator.
V-1
All Employer Contributions and Employer Bonus Contributions
made by a Participating Company on behalf of a Participant shall be
automatically invested 100% in the Company Stock Fund; provided, however, a
Participant may at any time thereafter redirect the investment thereof into one
or more of the other Investment Funds.
5.3 A Participant may change his investment election with
respect to his future Deferred Contributions to be made under the Plan as of the
next Valuation Date. Such change shall be limited to the investment choices
described in Attachment A. The Participant's election to change his investment
election may be made in any manner provided by the Plan Administrator. Elections
shall be processed as soon as reasonably practicable after receipt.
5.4 The value of a Participant's Accounts which are held in an
Investment Fund that is a mutual fund shall be determined as of each Valuation
Date based on the published value of a unit in such mutual fund as of the
applicable Valuation Date.
5.5 The value of a Participant's Accounts which are held in
the Company Stock Fund maintained hereunder shall be determined as of each
Valuation Date and shall be based upon the reported price of the Company Stock
at the close of business on that day. Any interfund transfers, withdrawals or
distributions from a Participant's Accounts which are held in the Company Stock
Fund shall be effected by deducting the appropriate number of shares of Company
Stock allocated to the Participant from the Company Stock Fund as of such
Valuation Date. The value of such shares of Company Stock determined in
accordance with this section in the event of an interfund transfer, or the
amount to be paid to the Participant in the event of a cash distribution,
withdrawal or the purchase of an annuity shall be the value of the Company Stock
on the date the Participant's account was liquidated to effect such transfer or
withdrawal. In the event of a
V-2
distribution in kind, the number of shares deducted shall be distributed, with
any fractional shares converted to cash at the value determined in accordance
with this section.
5.6 If not received in the form of an Employer matching
contribution, shares of Company Stock shall be purchased by the Trustee acting
independently as to when such purchases are made, the number of shares to be
purchased, the prices to be paid and if the Company elects not to sell Company
Stock to the Trustee at such time, the broker, if any, employed to effect the
purchases. The Trustee shall vote the shares of Company Stock held in the
Company Stock Fund for the respective Accounts of the Participants under the
Plan in accordance with the directions of such Participants, provided such
directions are received by the Trustee at least five days before the date set
for the meeting at which such shares are to be voted. The Trustee shall vote
shares of Company Stock for which it has not received timely instructions on a
particular matter, as well as any shares held by the Trustee pending allocation
to the Participant's Company Stock Accounts, in the Trustee's discretion.
5.7 A Participant may elect to transfer all or a portion of
the value of his Accounts from one Fund to another. The Participant's election
to transfer must be made in accordance with procedures established by the Plan
Administrator. Any such change shall be made operative as soon as practicable
after the date such election is received.
5.8 Each Participant (or, in the event of his death, his
Beneficiary) shall have the right, to the extent of the number of shares of
Company Stock allocated to his Accounts in the Company Stock Fund, respectively,
to instruct the Trustee in writing as to the manner in which to respond to a
tender offer or exchange offer with respect to such shares. The Plan
Administrator shall use its best efforts timely to distribute or cause to be
distributed to each present or former Participant
V-3
(or Beneficiary thereof) such information as will be distributed to stockholders
of the Company in connection with any such tender offer or exchange offer. Upon
timely receipt of such instructions, the Trustee shall respond as instructed
with respect to shares of such stock. The instructions received by the Trustee
from Participants shall be held by the Trustee in confidence and shall not be
divulged or released to any person, including officers or employees of the
Company or any Affiliated Company. If the Trustee shall not receive timely
instructions from a Participant (or Beneficiary thereof) as to the manner in
which to respond to such tender offer or exchange offer, such Participant (or
Beneficiary) shall be deemed to have instructed the Trustee not to tender or
exchange the Company Stock.
V-4
SECTION VI
VESTING
6.1 The Participant's interest in his Deferred Contributions
Account, Rollover Account and Participant Contributions Account shall be 100%
vested in him at all times.
6.2 The Participant's interest in his Employer Contributions
Account shall become 100% vested in him at the earliest of the following dates:
(a) The date of the Participant's death while employed by an
Affiliated Company.
(b) The date the Participant incurs a Total Disability while
employed by an Affiliated Company.
(c) The Participant's attainment of his Normal Retirement Age
while employed by an Affiliated Company.
(d) The date of the Participant's Retirement.
(e) The date of complete cessation of Employer contributions
hereunder.
6.3 In addition, each Employee who became a Participant on the
effective date of the Plan shall be 100% vested at all times thereafter in his
Employer Contributions Account, including his transferred SFP Plan Employer
Contributions Account, if any.
6.4 Prior to the date that the Participant's interest in his
Employer Contributions Account becomes fully vested in accordance with Section
6.2, the Participant shall have a vested interest therein (subject to Section
8.5) as determined in accordance with the following schedule:
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Number of Years Vested
Of Service Percentage
--------------- ----------
Less than 1 year 0%
1 year but less than 2 years 20%
2 years but less than 3 years 40%
3 years but less than 4 years 60%
4 years but less than 5 years 80%
5 years or more 100%
6.5 In the event a Participant ceases to be in the Eligible
Class but remains an Employee, the Participant shall have a vested interest
determined in his Employer Contributions Account as if the Participant had
remained an Employee in the Eligible Class.
6.6 No amendment to the vesting provisions or merger of
another plan into this Plan shall deprive a Participant of his nonforfeitable
right accrued under this Plan or any other plan to the date of any such
amendment or merger.
In the event of an amendment to the Plan or the merger of
another plan into this Plan which directly or indirectly affects the computation
of a Participant's nonforfeitable percentage under this Plan or another plan,
each Participant with at least three Years of Service may irrevocably elect to
have his nonforfeitable percentage computed under this Plan without regard to
such amendment or merger.
Such election may be made in writing to the Plan Administrator
any time after the adoption of any such amendment or merger, provided, however,
that the election period shall end no earlier than the latest of 60 days
following the date the amendment or merger is adopted or effective or the date
the Participant is given written notification of the amendment or merger by the
Company or Plan Administrator.
VI-2
SECTION VII
WITHDRAWALS PRIOR TO TERMINATION OF EMPLOYMENT
7.1 Subject to the spousal consent requirements of Section
7.5, a Participant who is an Employee may elect to withdraw an amount equal to
all or a specified portion of the value of (1) his Participant Contributions
Account, if any, and (2) provided he has previously withdrawn or is currently
withdrawing all of his Participant Contributions Account, his Rollover Account,
if any.
Each such withdrawal election must be made to the Company in
the manner established by the Plan Administrator and shall be processed as soon
as reasonably practicable. The total amount to be so withdrawn shall be that
specified in such notice and shall be made pro rata from the various Funds in
which such Account is invested. Amounts withdrawn from the Participant
Contributions Account shall be taken first from that portion of the Account
attributable to the Participant's pre-1987 contributions. Withdrawals shall be
payable only in cash, with the exception that a withdrawal from the Company
Stock Fund may be paid in cash or in whole shares (to the extent possible) as
elected by the Participant.
7.2 Subject to the spousal consent requirements of Section
7.5, a Participant who is an Employee and who has previously withdrawn or is
currently withdrawing the maximum amount available (if any) to such Participant
under Section 7.1 may request a hardship withdrawal from his Employer
Contributions Account of an amount equal to a specified portion of (1) the
vested amount of his Employer Contributions Account and (2) provided the
Participant has previously withdrawn or is requesting to withdraw the maximum
amount permitted above with respect to his Employer Contributions Account, his
Deferred Contribution Account (but not including amounts
VII-1
representing income which is credited to a Participant's Deferred Contributions
Account after December 31, 1988).
The Participant's request to make a hardship withdrawal must
be made in writing to the Plan Administrator. The basis for the Plan
Administrator consenting to or refusing to consent to the Participant's
withdrawal request shall be that of demonstrated "hardship." For purposes of
this Section 7.2 a "hardship" will exist only if there is an "immediate and
heavy financial need" of the Participant (as defined below) and a withdrawal
under this Section is necessary to satisfy such financial need. A financial need
shall not fail to qualify as immediate and heavy merely because such need was
reasonably foreseeable or voluntarily incurred by the Participant.
A withdrawal request will be deemed to be made on account of
an "immediate and heavy financial need" of the Participant if the request is on
account of:
(1) Expenses for medical care described in Section 213(d) of
the Code incurred by the Participant, the Participant's spouse, or any
dependents of the Participant (as defined in Section 152 of the Code)
or necessary for such persons to obtain such medical care;
(2) Purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Payment of tuition, room and board expenses and related
educational fees for the next 12 months of post-secondary education for
the Participant, his spouse, children, or dependents;
(4) The need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage of the
Participant's principal residence; or
VII-2
(5) Other "safe-harbor" definitions of deemed immediate and
heavy financial needs with respect to 401(k) contributions promulgated
by the Commissioner of Internal Revenue through the publication of
revenue rulings, notices, and other documents of general applicability.
Moreover, a withdrawal will not be treated as necessary to
satisfy an immediate and heavy financial need of a Participant unless all of the
following requirements are satisfied:
(1) The Participant states in writing that the requested
withdrawal is not in excess of the amount of the immediate and heavy
financial need of the Participant;
(2) If a withdrawal is to be made from the Participant's
Deferred Contributions Account, the Participant has obtained all
distributions, other than 401(k) hardship distributions, and all
nontaxable loans concurrently available under all plans maintained by
the Affiliated Companies;
(3) If a withdrawal is to be made from the Participant's
Deferred Contributions Account, the Participant's contributions under
the Plan and all other plans of the employers (other than welfare
benefit plans) will be suspended for 12 months after receipt of the
hardship withdrawal and the Participant may not elect Deferred
Contributions for the Participant's taxable year immediately following
the taxable year of the hardship withdrawal in excess of the applicable
limit under Section 402(g) of the Code for such taxable year less the
amount of such Participant's Deferred Contributions for the taxable
year of the hardship withdrawal; and
(4) If a withdrawal is to be made from the Participant's
Employer Contribution Account, but not his Deferred Contributions
Account, the Participant's contributions to the
VII-3
Plan will be suspended for a period of six months, unless the
Participant's aggregate period of participation in the Plan at the time
of such withdrawal equals or exceeds 60 months.
Each such withdrawal shall be processed as soon as reasonably
practicable and shall be given effect as of the applicable Valuation Date. The
total amount to be so withdrawn shall be that specified in such written notice
(which, with respect to a hardship withdrawal, may include any amounts necessary
to pay any taxes or penalties reasonably anticipated to result from the
withdrawal) and such withdrawal shall be made pro rata from the respective
investment Funds in which such Account is invested. Withdrawals shall be payable
only in cash, with the exception that a withdrawal from the Company Stock Fund
may be paid in cash or in whole shares (to the extent possible), as elected by
the Participant.
7.3 Subject to the spousal consent requirements of Section
7.5, a Participant who is an Employee and age 59-1/2 or older may elect to
withdraw an amount equal to all or a specified portion of his vested Accounts.
Any such withdrawal shall be taken from his Accounts in the following order:
Participant Contributions Account, Rollover Account, Deferred Contributions
Account and last, the Employer Contributions Account; however, unless the
Participant's aggregate period of participation in the Plan (and SFP Plan) at
the time of any withdrawal from the Employer Contributions Account equals or
exceeds 60 months, the Participant's contributions to the Plan will be suspended
for a period of six months.
Each such withdrawal shall be processed as soon as reasonably
practicable and shall be given effect as of the applicable Valuation Date. The
total amount to be so withdrawn shall be that specified in such notice and such
withdrawal shall be made pro rata from the respective investment Funds in which
such Account is invested. If the value of an Account, as of the actual
VII-4
date of withdrawal, is lower than the value upon which the Participant shall
have based his withdrawal election, the total amount to be so withdrawn shall be
limited to the value of the Participant's vested interest in such Account as of
the date of such withdrawal. Withdrawals shall be payable only in cash, with the
exception that a withdrawal from the Company Stock Fund may be paid in cash or
in whole shares (to the extent possible), as elected by the Participant.
7.4 Amounts withdrawn by a Participant may not be returned to
this Plan. If a Participant has an outstanding Plan loan pursuant to Section
XIV, no withdrawal shall be permitted which would reduce the Participant's
vested interest in his Accounts that are security for such loan below the
outstanding principal balance of the loan plus any interest to be accrued with
respect to such loan.
7.5 If the Participant is married as of the date of any
withdrawal, no withdrawal shall be permitted unless the Participant's spouse
consents to such distribution as provided in Section 8.4.
VII-5
SECTION VIII
DISTRIBUTIONS OTHER THAN WITHDRAWALS
8.1 Upon the Participant's separation from service (within the
meaning of Section 401(k) of the Code), other than by death, the Participant
shall receive a distribution of the vested value of his Accounts on or as soon
as reasonably practical following the later of his termination date or Normal
Retirement Date. Payment of the Participant's benefits shall be effected by
purchasing an annuity contract with the Participant's vested Account balances,
which provides for a straight life annuity, if the Participant is not married,
or a Qualified Joint and Survivor Annuity, if the Participant is married, from
an insurance company selected by the Plan Administrator, unless the Participant
elects, as provided below, to receive his Accounts in one of the optional forms
of payment. Any annuity contract distributed pursuant to the Plan shall be
nontransferrable.
The optional forms of payment available under the Plan are:
Option 1: Life Annuity -- a level monthly benefit payable to
the Participant for his lifetime.
Option 2: Joint and Survivor Annuity -- a reduced level
monthly benefit payable to the Participant for his lifetime and
following the Participant's death, 50% (or, if elected by the
Participant 75% or 100%) of such reduced monthly benefit payable to his
designated contingent annuitant, if then living, for his lifetime.
Option 3: Certain and Continuous Annuity -- a reduced level
monthly benefit payable to the Participant for his lifetime, combined
with a period certain of 5, 10 or 15 years (as selected by the
Participant); if the Participant dies prior to the end of the
designated
VIII-1
period certain, such reduced monthly benefits shall continue to be paid
to the Participant's Beneficiary for the balance of such period
certain.
Option 4: Period Certain Installment -- a reduced level
monthly benefit paid to the Participant for a period certain of either
5, 10 or 15 years (as selected by the Participant) with payments
stopping at the end of the designated period certain; if the
Participant dies prior to the end of the designated period certain,
such reduced monthly benefits shall continue to be paid to the
Participant's Beneficiary for the balance of such period certain.
Option 5: Installment Refund Annuity -- a reduced level
monthly benefit payable to the Participant for his lifetime and in the
event of the death of the Participant prior to the receipt of an amount
equal to the net premium paid for such annuity contract, the excess of
the net premium over the amount received as of the Participant's date
of death will be paid to the Participant's Beneficiary in a lump sum.
Option 6: Lump Sum -- all of the Participant's vested Account
balances paid in a single lump sum payment in cash; however, an Account
invested in the Company Stock Fund can be paid all in stock or part in
stock (whole shares only) and part in cash at the election of the
Participant.
Option 7: Combination -- a combination of Option 6 and any one
of Options 1 through 5.
The Plan Administrator shall furnish the Participants with general information
concerning the forms of payments available within a reasonable period prior to
their Annuity Starting Date. All optional annuity forms shall be the actuarial
equivalent of the single life annuity for the Participant.
VIII-2
Upon the termination of his employment with all Affiliated
Companies prior to his Normal Retirement Date, a Participant may elect (subject
to Section 8.4 if married) in writing to receive a distribution of the vested
value of his Accounts in the automatic form or in any one of the optional
methods described above beginning as soon as reasonably practicable after a
specified Valuation Date preceding his Normal Retirement Date. Further, a
Participant who ceases to be an Employee may elect in writing to defer the
commencement of his benefits to any Valuation Date that is on or after his
Normal Retirement Date and before the April 1 following the calendar year in
which he reaches 70-1/2.
Notwithstanding the foregoing provisions of this Section 8.1
to the contrary however, if upon termination of employment with all Affiliated
Companies the vested value of the Participant's Accounts does not (and at the
time of any prior withdrawal did not) exceed $3,500, the payment of the
Participant's vested benefits shall be made automatically in a single lump sum
payment in cash and Company Stock to the extent then invested in the Company
Stock Fund under the Plan as soon as reasonably practicable following the date
of his termination of employment.
Unless the Participant elects otherwise, all distributions
shall be made or begin not later than the 60th day after the latest of the close
of the Plan Year in which (a) the Participant attains his Normal Retirement Age,
(b) occurs the 10th anniversary of the year in which the Participant began
participation in the Plan and (c) the Participant terminates his employment with
all Affiliated Companies.
Further, all distributions shall be made or commence by the
April 1 following the calendar year in which the Participant reaches age 70-1/2,
regardless of whether the Participant has then terminated employment. Such
benefit shall be paid with respect to a terminated Participant in
VIII-3
the applicable automatic annuity form described in Section 7.1, unless an
optional form is elected. With respect to a Participant who has not then
terminated employment, such required distribution shall be a single payment
based on the Participant's ending Account balances for the applicable
distribution year (as determined under Section 401(a)(9) of the Code) based on
his life expectancy (without a redetermination), less any withdrawals for such
year.
The provisions of Section 401(a)(9) of the Code, including
Reg. ss.1.401(a)(9)-2, are hereby incorporated by reference and shall control
over any Plan provision in conflict therewith.
8.2 The Plan Administrator shall furnish the following
information to the Participant within a reasonable period prior to the Annuity
Starting Date:
(a) a description or explanation, written in non-technical
language, of the terms and conditions of the Qualified Joint and
Survivor Annuity as well as the straight life annuity if not married,
(b) the Participant's right to make, and the effect of, an
election to waive the automatic form of payment,
(c) the rights of the Participant's spouse concerning the
consent to any such election, and
(d) the right to make, and the effect of a revocation of an
election not to receive the automatic form.
8.3 If a Participant fails to make an election during the
election period, such Participant shall be deemed to have elected the Qualified
Joint and Survivor Annuity if he is married or the straight life annuity if he
is not married. The election period shall be the period of not more
VIII-4
than 90 days and not less than 30 days prior to the Participant's Annuity
Starting Date. A Participant may revoke and remake his election any number of
times during the election period.
8.4 No election to waive the Qualified Joint and Survivor
Annuity made by a married Participant, other than an election of Option 2 with
his spouse as his contingent annuitant, shall be effective unless the
Participant's spouse consents in writing to such election, such election
designates a beneficiary (or a form of benefits) which may not be changed
without a new spousal consent and the spouse's consent acknowledges the effect
of such election on the spouse's right to benefits under the Plan and is
witnessed by a Plan representative or a notary public. The spousal consent
requirement shall not apply if it is established to the satisfaction of the Plan
Administrator that there is no spouse, the spouse cannot be located or due to
such other circumstances as may be permitted by Treasury regulations.
8.5 If the Participant's employment with all Affiliated
Companies is terminated prior to his being 100% vested in his Employer
Contributions Account, then that nonvested portion of his Employer Contributions
Account shall be forfeited as of the earlier of the date the Participant
receives a total distribution of his vested interest or the Valuation Date
coincident with or next following the date the Participant incurs five
consecutive Breaks in Service; however, if a Participant who incurs a forfeiture
again becomes an Employee prior to incurring five consecutive Breaks in Service,
he may reinstate the earlier forfeited amount (unadjusted for any subsequent
Trust earnings or losses) by repaying to the Plan in cash an amount equal to the
distribution prior to the earlier of incurring five consecutive Breaks in
Service or the fifth anniversary of the date he again becomes an Employee. Any
reinstated forfeited amounts shall be taken from current forfeitures or special
VIII-5
Employer contributions. Any amounts forfeited by Participants shall be used to
offset future Employer contributions under this Plan except as otherwise
provided in Section 12.3 hereof.
If either a distribution is made to a terminated Participant
from his Employer Contribution Account when he is less than 100% vested therein
and he is reemployed prior to incurring five consecutive Breaks in Service or a
withdrawal is made from the Employer Contribution Account pursuant to Section
7.2 or 7.3 by a Participant who is not 100% vested therein, the vested portion
of his Employer Contribution Account shall thereafter, until such time as he may
become 100% vested, be an amount ("X") determined by the formula: X = P (AB + D)
- - D. For purposes of applying the formula: P is the vested percentage at the
relevant time; AB is the account balance at the relevant time; and D is the
amount of the distribution or withdrawal.
8.6 In addition to the foregoing distributions, all Accounts
of an affected Participant shall be distributed to him as soon as
administratively feasible after the disposition (1) of substantially all of the
assets (within the meaning of Code Section 409(d)(2) used by the Company or
Employer in the trade or business in which the Participant is employed if the
Participant continues employment with the corporation acquiring such assets, or
(2) of the Company's or an Employer's interest in a subsidiary (within the
meaning of Code Section 409(d)(3)) which employs the Participant if the
Participant continues employment with such subsidiary. However, an event shall
not be treated as described in (1) or (2) above unless the transferor
corporation continues to maintain the Plan after the disposition.
Further, all Accounts shall be distributed upon a termination
of the Plan without a "successor plan" as defined in Section 401(k) of the Code
and regulations thereunder.
VIII-6
8.7 DIRECT ROLLOVER DISTRIBUTIONS. Notwithstanding any
provision of the Plan to the contrary that would otherwise limit a distributee's
election under this Section, a distributee may elect, at the time and in the
manner prescribed by the plan administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.
Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution does
not include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code; and the portion of
any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities).
Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving spouse and
the employee's or former employee's
VIII-7
spouse or former spouse who is the alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the Code, are distributees with
regard to the interest of the spouse or former spouse.
Direct rollover: A direct rollover is a payment by the plan to
the eligible retirement plan specified by the distributee.
8.8 30-DAY WAIVER. If a distribution is one to which sections
401(a)(11) and 417 of the Internal Revenue Code do not apply, such distribution
may commence less than 30 days after the notice required under section
1.411(a)-11(c) of the Income Tax Regulations is given, provided that:
(1) the plan administrator clearly informs the participant
that the participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
(2) the participant, after receiving the notice, affirmatively
elects a distribution.
VIII-8
SECTION IX
DEATH BENEFITS, BENEFICIARIES, UNCLAIMED BENEFITS
9.1 Upon the death of a vested Participant prior to his
Annuity Starting Date, a deceased Participant's vested Account balances shall be
applied to the purchase of a single life annuity contract for his Beneficiary
from an insurance company selected by the Plan Administrator unless the
Beneficiary elects one of the optional forms (other than the Qualified Joint and
Survivor Annuity) provided in Section 8.1. However, the Participant's entire
vested interest under the Plan must be distributed to his Beneficiary within
five years of his date of death unless his Beneficiary is his spouse, in which
event such spouse may elect to receive such death benefit over her life (or a
period not extending beyond the spouse's life expectancy) with the benefits
commencing as of any date specified by the spouse but not later than the date on
which the Participant would have reached age 70-1/2 had he lived. And, if the
Beneficiary is the Participant's estate (or a nonperson such as a trust), the
form of distribution shall be a single lump sum payment and not the purchase of
a single life annuity contract.
9.2 Except as provided below, the Participant shall have the
unrestricted right to designate the Beneficiary to receive the death benefits to
which he is entitled under the Plan and to change any such designation. Each
such designation for death benefits shall be evidenced by a written instrument
filed with the Plan Administrator and signed by the Participant. However, if a
Participant is married and wishes to designate a Beneficiary other than his
spouse, he must submit his spouse's written consent, executed and witnessed by a
Plan representative or a notary public, which consent must acknowledge the
affect of the consent on the spouse's right to benefits under the Plan and be
specific as to the form of payment elected and the other Beneficiary designated,
if
IX-1
applicable. No change (other than a revocation) in such election may be made by
a married Participant without obtaining a new spousal consent as provided below.
If no such designation is on file with the Plan Administrator at the time of the
death of the Participant, or if for any reason such designation is defective,
then the Participant's spouse, if living, his children, if living, or his
estate, in that order of preference, shall be conclusively deemed to be the
Beneficiary designated to receive such benefit. A Participant's marriage or
divorce subsequent to making a written beneficiary designation shall
automatically revoke such prior designation.
The Plan Administrator shall provide each Participant, within
the applicable period for such Participant (as defined below), a written
explanation of the qualified preretirement survivor annuity provided in Section
9.1 above in such terms and in such a manner as would be comparable to the
explanation provided for meeting the requirements of Section 8.2 applicable to a
Qualified Joint and Survivor Annuity. The applicable period for a Participant is
whichever of the following periods ends last: (i) 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; or (ii) a reasonable period ending after the individual becomes
a Participant. Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after separation of service in case of a Participant
who separates from service before attaining age 35.
Notwithstanding anything above in this Section 9.2 to the
contrary, a designation of a beneficiary other than the Participant's spouse by
a Participant who has not attained age 35 will not be valid unless the
Participant receives a written explanation of the qualified preretirement
survivor annuity provided by Section 9.1 in such terms as are comparable to the
explanation required
IX-2
under Section 8.2. Further, the qualified preretirement survivor annuity
coverage of Section 9.1 will be automatically reinstated, i.e., the
Participant's spouse will automatically again become his sole beneficiary
entitled to the annuity provided in Section 9.1, as of the first day of the Plan
Year in which the Participant attains age 35 unless a new beneficiary
designation is filed by the Participant on or after such date, which new
designation complies in full with the above requirements of this Section 9.2
concerning spousal consent.
9.3 If benefits remain to be paid at a time when the Plan
Administrator is unable to locate the Participant or his Beneficiary, the Plan
Administrator shall cause the Participant's benefits to be forfeited. However,
such benefit shall be reinstated if a subsequent claim is made for the same.
9.4 Notwithstanding the foregoing provisions of this Section
IX, if, upon the death of a Participant prior to his Annuity Starting Date, the
vested value of his Accounts does not exceed $3,500, the payment of the
Participant's benefits shall be made to his Beneficiary in a single lump sum in
cash and Company Stock to the extent then invested in the same under the Plan as
soon as reasonably practicable after the monthly Valuation Date on or next
following the date of the Participant's death.
9.5 Upon the death of a Participant on or after his Annuity
Starting Date, the death benefit payable under the Plan, if any, shall be
determined by the form (and the terms) of benefit payment elected by the
Participant, with the remaining portion, if any, distributed as rapidly as under
the method of distribution in effect on his date of death.
IX-3
SECTION X
ADMINISTRATION
10.1 The Plan shall be administered by the Plan Administrator
which shall also be the Named Fiduciary. The Plan Administrator may delegate
from time to time ministerial duties to employees of the Participating Companies
and, further, may delegate its fiduciary duties among the members of the Plan
Administrator. From time to time, the Chairman of the Plan Administrator shall
certify to the Trustee, the person or persons designated by the Plan
Administrator to give notifications, instructions or advice to the Trustee. The
Plan Administrator shall be entitled to rely upon certificates of or
communications from a Participating Company or from the Trustee as to
information pertinent to any calculation or determination under the Plan. The
Plan Administrator shall furnish to the Pension Committee of the Board upon
request appropriate reports with respect to the administration and operation of
the Plan and its trust.
10.2 ADMINISTRATIVE POWERS. The Plan Administrator shall have
full power and authority, within the limits provided by the Plan:
(a) To determine all questions arising concerning the
construction and interpretation of the Plan and in its administration,
including, but not by way of limitation, the determination of the
rights or eligibility under the Plan of Employees and Participants and
their Beneficiaries;
(b) To adopt such rules and regulations as it may deem
reasonably necessary for the proper and efficient administration of the
Plan consistent with its purposes;
(c) To enforce the Plan, in accordance with its terms; and
X-1
(d) To do all other acts, in its judgment necessary or
desirable, for the proper and advantageous administration of the Plan.
The Plan Administrator shall act with or without a meeting by
the vote or concurrence of a majority of its members; but no member of the Plan
Administrator who is a Participant shall take part in any Plan Administrator
action or any matter that has particular reference to his own interest
hereunder. The Plan Administrator shall administer this Plan and discharge its
responsibilities hereunder in a uniform and nondiscriminatory manner as to all
Participants.
10.3 INFORMATION TO BE PROVIDED TO PARTICIPANTS AND OTHERS.
The Plan Administrator shall see that books of account are kept which shall show
all receipts and disbursements and a complete record of the operation of the
Plan, including records of the accounts of individual Participants. At least
once in each year, the Plan Administrator shall cause to be furnished to each
Participant a statement indicating on the basis of the latest available
information the status of the Participant's Account.
10.4 The Plan Administrator will direct the Trustee to make
investments pursuant to Section V hereof.
10.5 In any case where the provisions of this Plan require the
consent or approval by the Plan Administrator of an election or request made by
an Employee, Participant or Beneficiary in order to make such election or
request effective, the Plan Administrator shall act on such election or request
as promptly as shall be reasonable in the circumstances. In any case where
action by the Trustee is necessary in order to make operative an effective
election or request made by a Participant or Beneficiary, it shall be the
responsibility of the Plan Administrator to transmit such election or request to
the Trustee in writing and as promptly as shall be reasonable in the
circumstances. The
X-2
Trustee shall not be obliged to take action with respect to any particular
election or request unless the Trustee shall have received the election or
request in such form and detail as shall reasonably be required by the Trustee.
10.6 EMPLOYMENT OF ADVISORS AND STAFF. The Plan Administrator
may employ accountants, legal counsel, consultants, and any other persons or
organizations it deems necessary or proper to assist it in the performance of
its duties under the Plan.
10.7 FIDUCIARY DUTIES. The Plan Administrator shall discharge
its duties solely in the interest of the Participants and Beneficiaries and for
the exclusive purpose of providing benefits to Participants and their
Beneficiaries. They shall discharge their duties with the care, skill, prudence
and diligence under the circumstances then prevailing that a prudent man acting
in a like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with the like aims.
10.8 INDEMNIFICATION. Except as provided by law, the
Participating Companies, their directors, officers, employees and agents and the
Plan Administrator, or any of them, shall not incur any personal liability for
the breach of any responsibility, obligation or duty in connection with any act
done or omitted to be done in good faith in the management and administration of
the Plan and the investment and handling of the accounts and shall be
indemnified and held harmless by the Participating Companies from and against
any such personal liability including all expenses reasonably incurred in its or
their defense in case the Participating Companies fail to provide such defense.
X-3
SECTION XI
PROVISIONS RESPECTING THE COMPANY
11.1 AMENDMENT OF PLAN. This Plan may be amended at any time
and from time to time by the Plan Administrator or resolution of the Board of
Directors of the Company; however, the Plan Administrator may not amend the Plan
in any manner which would increase the level of Participating Company
contributions. The Plan, as amended, shall apply to the Participants and
Participating Companies, unless a Participating Company elects to withdraw from
the Plan. Such power of amendment shall under no circumstances include the right
to reinvest or otherwise transfer any interest in or to the accounts, or any
income therefrom, to any Participating Company; nor shall the power of amendment
include the right, in any way or to any extent, to divest any Participant of the
interest in his Accounts to which he would be entitled if he had terminated his
service immediately before such amendment, eliminate any "protected benefit"
except as otherwise permitted by Treasury Regulations or impose any Employer or
Plan Administrator consent on the exercise of a Participant's elections under
the Plan other than as permitted by Treasury Regulations; provided further that
the rights, duties or responsibilities of the Trustee shall not be substantially
changed without its written consent. Neither shall such power of amendment be
exercised in any way which would or could give to any Participant or Beneficiary
any right or thing of exchangeable value in advance of the receipt of
distributions hereunder. There shall be no merger or consolidation of part or
all of the Plan with, or any transfer of part or all of its assets or
liabilities to, any other plan or trust ("Other Plan") unless, pursuant to the
terms of such merger, consolidation or transfer, each Participant and
Beneficiary in the Plan whose interests are so merged, consolidated or
transferred into, with, or to the Other Plan would (if the Other Plan were then
terminated) receive a benefit
XI-1
immediately after such merger, consolidation or transfer which would be equal to
or greater than the benefit he would have been entitled to receive immediately
before such merger, consolidation or transfer (if the Plan were then
terminated). Notwithstanding the foregoing provisions of this Section, this Plan
may be amended in any manner whatsoever, with prospective or retroactive effect,
for the purpose of qualifying it under, or complying with, any provision of the
Code or ERISA.
11.2 TEXAS LAW TO GOVERN. This Plan shall be construed and
regulated and its validity and effect and the rights hereunder of all parties
interested shall at all times be determined, and this Plan shall be
administered, in accordance with the laws of the State of Texas, subject,
however, to applicable provisions of any federal law.
11.3 INTENT. The Participating Companies intend that this
Plan, as amended from time to time, shall constitute a qualified plan under the
provisions of Sections 401(a), (k) and (m) of the Code. The Participating
Companies intend that this Plan shall continue to be maintained by them for the
above purposes indefinitely, subject, however, to the rights reserved to amend
and terminate the Plan as set forth herein. Nothing contained in this Plan shall
be construed as disqualifying any Employee of any Participating Company from any
benefits under any other plan or program to which such Employee would be
entitled in the absence of this Plan.
XI-2
SECTION XII
TERMINATION OF PLAN
12.1 This Plan may be terminated as to all Participating
Companies on any date specified by the Company upon 10 days' advance written
notice of the termination to the Plan Administrator and the Participating
Companies. This Plan shall be terminated at any time as to any particular
Participating Company, for the following reasons:
(a) The Participating Company voluntarily terminates this
Plan;
(b) The final and total discontinuance of Participating
Company contributions hereunder;
(c) The legal dissolution, merger, consolidation or
reorganization of the Participating Company; or
(d) The date that Participating Company ceases to qualify as
an Affiliated Company.
Notwithstanding the foregoing, if any of the events described
above should occur but some or all of the Participants employed by a
Participating Company are transferred to another Participating Company
coincident with or immediately after the occurrence of such event, the Plan as
applied to those Participants will automatically continue in effect without a
termination thereof.
12.2 Except as provided for in Section XI hereof, each
Participant and the Beneficiary of each deceased Participant shall be vested
with all rights to any funds in his Accounts as of the date of such Plan
termination.
12.3 Any forfeitures which shall have occurred in accordance
with Section 9.3 hereof prior to the termination of this Plan but which shall
not have been applied to reduce Employer
XII-1
contributions hereunder shall be distributed pro rata to those Participants who
were Employees of the Participating Company or Companies on the effective date
of the termination of this Plan.
12.4 In the event of a partial termination of this Plan, the
provisions of this Section XII shall apply to each Participant affected by the
partial termination.
XII-2
SECTION XIII
MISCELLANEOUS PROVISIONS
13.1 This Plan is created for the exclusive benefit of
Employees of the Participating Companies and their Beneficiaries. If any
provision of this Plan is subject to more than one interpretation, then among
those interpretations which are possible, that one shall always be given to this
Plan and each and every one of its provisions which will be consistent with this
Plan being a qualified plan within the meaning of Section 401 of the Code, and
ERISA, or as they may be amended or replaced by any sections of the federal law
of like intent and purpose.
13.2 Except as provided by the terms of Section XI hereof, no
funds contributed hereunder or any assets of this Plan shall ever revert to, or
be used or enjoyed by, any Participating Company or any successor of any
Participating Company, nor shall any such funds or assets ever be used other
than for the benefit of the Participants or the Beneficiaries of such
Participants.
13.3 Any Affiliated Company may, with the consent of the
President, become a Participating Company in the Plan by filing a duly certified
copy of the resolution of its Board of Directors adopting the Plan and executing
and delivering such instruments and taking such other action as may be necessary
to put the Plan into effect with respect to such Affiliated Company.
13.4 No right or interest of any Participant of the Plan shall
be assignable or transferable in whole or in part, either directly or by
operation of law or otherwise, including, but in no way limited to, execution,
levy, garnishment, attachment, pledge or bankruptcy, and no right or interest of
any Participant in the Plan shall be liable for or subject to any obligation or
liability of such Participant, including claims for alimony or the support of
any Participant's spouse.
XIII-1
Notwithstanding any other provisions of this Plan, an
alternate payee under a qualified domestic relations order as determined in
accordance with Section 206 of ERISA shall be entitled, within 180 days from the
date the alternate payee receives written notification that the Company has made
such a determination, to elect to receive any benefits to which the alternate
payee is entitled payable in accordance with the distribution provisions set
forth in Section VIII of this Plan in full satisfaction of any liability of the
Plan to such person. Payment of the benefits from the Alternate Payee's account
shall be made or shall commence to be made as established by court order which
may provide for payment prior to the Participant's attainment of his "earliest
retirement age", or if not so specified, as of the Valuation Date coincident
with or next following the Participant's Normal Retirement Date or actual
retirement date, whichever is later. An alternate payee may make investment
elections pursuant to Section V of the Plan but may make withdrawals pursuant to
Section VII of the Plan.
13.5 Any person claiming entitlement to benefits in an amount
other than that received shall have the right after review and denial, in whole
or in part, of such claim by the Vice President-Employee Relations to a review
of such denial by the Plan Administrator. Such review shall be initiated by the
written request therefor by such person filed with the Plan Administrator within
60 days after receipt by the person of the denial by the Vice President-Employee
Relations. The written request shall state the nature of the claim, the facts in
support thereof and the amount claimed, and may include a demand for a personal
hearing before the Plan Administrator as well as for reasonable access to the
pertinent data upon which denial of the claim by the Vice President- Employee
Relations was based, which demands shall not be unreasonably denied. The Plan
Administrator shall conduct its review of the claim within 60 days after receipt
of the written request
XIII-2
of such person and furnish, within such time, to the claimant written notice of
its decision, including therein specific reasons and references to pertinent
Plan provisions upon which decision is based.
13.6 Copies of the Plan and any amendments thereto will be on
file at the principal office of each Employer where they may be examined by any
Participant or any other person entitled to benefits under the Plan.
13.7 If any person entitled to benefits under the Plan is
under a legal disability or, in the Plan Administrator's opinion, is
incapacitated in any way so as to be unable to manage his or her financial
affairs, the Plan Administrator may direct the payment of such benefits to such
person's legal representative or to a relative or friend of such person or such
person's benefit, or the Plan Administrator may direct the application of such
benefits for the benefit of such person in any manner which the Plan
Administrator may select that is permitted by federal law and is consistent with
the Plan. Any payments made in accordance with the foregoing provisions of this
section shall be a full and complete discharge of any liability for such
payments.
13.8 None of the establishment of the Plan, any modification
thereof, the creation of any fund or account, or the payment of any benefits
shall be construed as giving to any Participant or other person any legal or
equitable right against the Employers, the Plan Administrator or any Trustee
except as provided herein. Under no circumstances shall the maintenance of this
Plan constitute a contract of employment or shall the terms of employment of any
Participant be modified or in any way affected hereby. Accordingly,
participation in the Plan will not give any Participant a right to be retained
in the employ of any Employer. Neither the Plan Administrator nor any Employer
in any way guarantees any assets of the Plan from loss or depreciation or any
payment to
XIII-3
any person. The liability of the Plan Administrator or any Employer as to any
payment or distribution of benefits under the Plan is limited to the available
assets of the trust fund.
13.9 In any action or proceeding regarding any Plan assets,
any Plan benefits or the administration of the Plan, employees or former
employees of the Employers, their beneficiaries and any other person claiming to
have an interest in the Plan shall not be necessary parties and shall not be
entitled to any notice of process. Any final judgment which is not appealed or
appealable and which may be entered in any such action or proceeding shall be
binding and conclusive on the parties hereto and on all persons having or
claiming to have any interest in the Plan. To the extent permitted by law, if a
legal action is begun against the Plan Administrator, an Employer, or any
Trustee by or on behalf of any person and such action results adversely to such
persons, or if a legal action arises because of conflicting claims to a
Participant's or other person's benefit, the cost to the Employers, the Plan
Administrator, or the Trustee of defending the action will be charged to the
sums, if any, which were involved in the action or were payable to the
Participant or the other person concerned. Acceptance of participation in the
Plan shall constitute a release of the Company and the Plan Administrator, any
trustee and their agents from any and all liability and obligation not involving
willful misconduct or gross neglect to the extent permitted by applicable law.
Notwithstanding any other provisions of the Plan, if the Plan Administrator is
required by a final court order to distribute the benefits of a Participant
other than in a manner required under the Plan, then the Plan Administrator
shall cause the Participant's benefits to be distributed in a manner consistent
with such final court order. The Plan Administrator shall not be required to
comply with the requirements of a final court order in any action in which the
Plan Administrator, a Trustee, the Plan or the trust was not a party.
XIII-4
13.10 If any provisions of the Plan shall be held illegal or
invalid for any reason, such illegality shall not affect the remaining
provisions of the Plan, and the Plan shall be construed and enforced as if such
illegal and invalid provisions had never been set forth in the Plan.
13.11 TOP HEAVY RULES.
(a) If the Plan is or ever becomes "top-heavy" as determined
under subsection (b), the following special rules shall apply.
(1) If the Plan is top-heavy for a Plan Year, each
Participant who is an Employee on the last day of the Plan
Year shall receive an allocation of Employer contributions and
forfeitures equal to the product of
A the Participant's compensation during the
Plan Year, and
B the lesser of 3% or the ratio of Employer
contributions plus Deferred Contributions to
compensation with respect to the Key Employee (as
defined in subsection (c)) whose ratio is highest for
the year.
For purposes of this Section, including the determination of a
Participant's allocation of Employer contributions under
Section IV if this Section applies, compensation shall mean
the total amount of wages, tips and other compensation shown
on an Employee's Form W-2 for the Year, but not to exceed
$150,000, as adjusted by the Treasury from time to time.
An Employee shall not fail to receive an allocation
pursuant to this subsection because (i) he fails to elect to
make Deferred Contributions for the Plan Year, (2) receives
compensation less than a stated amount or (3) completes less
than 1,000 Hours of Service.
XIII-5
Notwithstanding any other provisions of the Plan, an
Employee shall not forfeit any allocations made pursuant to
this subsection because of a withdrawal of Deferred
Contributions.
If a Participant also participates in a defined
benefit plan maintained by the Employer or an Affiliated
Company which is top-heavy, the minimum allocation percentage
specified in this subsection shall be increased to 5% of
compensation. This sentence shall not apply to the extent that
the Participant participates in any other plan or plans of the
Employer or an Affiliated Company which provide that the
defined benefit minimum allocation or benefit applicable to
top-heavy plans will be provided by such other plan or plans.
(2) All Employer-provided benefits shall become fully
vested upon completion of three Plan Years during which the
Participant completes 1,000 Hours of Service, and a person who
is not already a Participant shall become a Participant upon
the first day he meets all the eligibility requirements of
Section 3.1. (b) This Plan is "top heavy", if, as of the last
day of the preceding Plan Year (the
Determination Date) (or the initial Plan Year for its year of
establishment), the amount credited to the Accounts of Key Employees
(as defined in subsection (c)) exceeds 60% of the amount credited to
the Accounts of all Participants (except former Key Employees).
Notwithstanding the foregoing, the Plan shall not be top heavy if, as
of the Determination Date described above, it is included in either a
"required aggregation group" or a "permissive aggregation group" which
is not a "top heavy group." A required aggregation group is each plan
in which a Key Employee participates or which allows such plan to meet
the
XIII-6
requirements of Code Section 401(a)(4) or 410. A permissive aggregation
group is the required aggregation group of plans plus any other plan or
plans of the Employer which, when considered as a group with the
required aggregation group, would continue to satisfy the requirements
of Code Section 401(a)(4) or 410. For purposes of determining whether
this Plan is top heavy, the aggregate distributions (without interest
thereon) made under the Plan to a Participant during the 5-year period
ending on the Determination Date shall be taken into account if the
Participant's account or benefit is otherwise taken in account in
determining whether the Plan is top heavy. However, the accrued
benefits of any Participants who have performed no services for the
Affiliated Companies during the five-year test period shall be
disregarded.
The accrued benefit of a nonkey employee shall be
determined under the method that uniformly applies to all defined
benefit plans of the employer or, if there is none, as if such benefit
accrued not more rapidly than the slowest accrual rate permitted under
the fractional rule of Code Section 411(b)(1)(C).
(c) A Participant shall be a "Key Employee" if, during the
Plan Year in question or any of the four preceding Plan Years, he is:
(1) an officer of the Employer having annual
compensation greater than 50% of the Code Section 415(b)(1)(A)
limit for such Plan Year (but no more than fifty Employees or,
if less, the greater of three Employees or ten percent of all
Employees) shall be taken into account, as specified by the
Plan Administrator;
XIII-7
(2) one of the ten Employees having compensation in
excess of the Code Section 415(c)(1)(A) limit for such Plan
Year and owning (or considered as owning within the meaning of
Section 318 of the Code) the largest interest in the Employer;
(3) 5% owner of the Employer; or
(4) 1% or more owner of the Employer having an annual
compensation from the Employer of more than $150,000.
Each Employee who is not a Key Employee shall be a nonkey employee.
(d) If, the Plan is top-heavy for a Plan Year, then for
purposes of computing the maximum additions described in Section 4.8,
the defined benefit plan fraction and the defined contribution plan
fraction shall be computed by substituting the number 1.0 for the
number 1.25.
The Employer may elect to disregard the preceding sentence if,
as of the last day of the preceding Plan Year, the amount credited to
the Accounts of Key Employees does not exceed 90% of the amount
credited to the Accounts of all Participants (except former Key
Employees).
If the Employer makes the election described in the preceding
sentence, the minimum allocation percentage specified in subsection (a)
shall be increased to 4% of compensation for all Participants and 7
1/2% for Participants who also participate in a defined benefit plan
maintained by the Employer or an Affiliated Company which is top-heavy.
XIII-8
SECTION XIV
LOANS
14.1 A Participant or beneficiary, who is a "party in
interest" as defined in ERISA Section 3(14), may borrow from the Plan, subject
to the following provisions of this Section XIV and to such additional standards
as the Plan Administrator may adopt, by making application to the Plan
Administrator. A Participant seeking a loan hereunder must submit a written
application (hereinafter referred to as the "completed application") which shall
(i) specify the terms pursuant to which the loan is requested to be made,
including the requested effective date, (ii) authorize the repayment of the loan
through payroll deductions, if applicable, and (iii) provide such information
and documentation as the Plan Administrator shall require. If the Participant is
married, his spouse must consent to such loan being secured by the Participant's
accrued benefit under the Plan as provided in this Section XIV and such consent
meets the requirements of Section 8.4.
14.2 Any loan to a Participant under this Section XIV shall be
subject to the following requirements:
(a) The loan may not exceed the lesser of $50,000 or 50% of
the value of the Participant's vested interest in his Accounts. The
maximum loan amount of $50,000 otherwise available to a Participant is
reduced by the excess, if any, of the highest outstanding balance of
Plan loans to the Participant during the one-year period ending on the
day before the loan is made over the outstanding balance of loans from
the Plan on the date when the loan is made.
(b) The loan must be at least $1,000.
XIV-1
(c) The loan shall provide for a fixed rate of interest for
the entire term of the loan. The applicable interest rate for Plan
loans shall be a reasonable rate equal to a commercially comparable
rate as established by the Plan Administrator consistent with the
provisions of Section 4975(d)(1) of the Code and other applicable legal
requirements.
(d) The loan shall be for a term not to exceed five years
except as provided below.
(e) Notwithstanding the five year limit in Section 14.2(d),
any loan used to acquire or construct any dwelling unit which, within a
reasonable time, is to be used as the principal residence of the
Participant may be for a term of up to 15 years.
(f) The Plan Administrator shall establish standards in
accordance with ERISA and the Code and such rules as it deems necessary
which shall be uniformly applicable to all Participants similarly
situated and shall govern the Plan Administrator's approval or
disapproval of completed applications. The terms for each loan shall be
set solely in accordance with this Section and such standards adopted
by the Plan Administrator in accordance with Section 14.4. Such
standards may prescribe minimum repayment periods, a maximum and
minimum loan amount (within the limitations specified above), and shall
require spousal consent for loans to married Participants and other
relevant factors.
(g) The Plan Administrator shall establish rules concerning
the frequency with which loans may be made under the Plan. Such rules,
as changed from time to time, shall be applied in a uniform and
nondiscriminatory manner and shall be communicated in writing to all
eligible Participants.
XIV-2
14.3 (a) Each loan shall be evidenced by a promissory note
executed by the person and payable to the Trustee, due and payable in
full not later than the earliest of: (i) a fixed maturity date meeting
the requirements of Section 14.2(d) above; (ii) the person's death; or
(iii) the time which the person ceases to be a party in interest.
(b) The promissory note shall provide for the payment of equal
installments (by payroll periods not less frequently than monthly) of
principal and interest on the unpaid balance of principal at the fixed
annual rate set forth in Section 14.2(c) on the date the note is
executed. The note shall further provide, with respect to a person who
is an Employee, that the payments shall be through payroll deductions.
(c) The promissory note shall evidence such additional terms
as are required by this Section 14.2 or by the Plan Administrator.
14.4 The Plan Administrator shall, in accordance with its
established standards, review and approve or disapprove a completed application
as soon as practicable after its receipt thereof, and shall promptly notify the
applying person of such approval or disapproval.
14.5 Loans shall be funded by exhausting Accounts or portions
thereof in the following order:
(a) First, the Rollover Account;
(b) Second, the SFP Plan Employer Contributions Account;
(c) Third, the vested portion of the Employer Contributions
Account;
(d) Fourth, the Deferred Contributions Account; and
(e) Fifth, the Participant Contributions Account.
XIV-3
14.6 Each loan shall be made only from the Accounts of the
borrowing Participant, shall be taken pro rata from the investment funds in
which such Accounts are invested, and shall be treated as a separate investment
of, and shall be allocated solely to, the Participant's Accounts from which the
Participant's loan was funded.
14.7 A person may elect to prepay the entire balance of the
loan at any time. A person may request a subsequent loan after full repayment of
a prior loan, subject to the maximum loan amount set forth in Section 14.2(a)
hereof. No partial prepayments will be permitted. All loan repayments shall be
transmitted by the Company or Participating Company to the Trustee as soon as
practicable after such amounts are withheld or received.
14.8 Each loan repayment of principal and interest will be
allocated to the Participant's Accounts in the same proportion from which the
loan was funded as provided in Section 14.5 hereof.
14.9 Repayment of any loan under the Plan shall be secured by
50% of the present value of the Participant's entire vested interest in the
Plan.
14.10 If a Participant with an outstanding loan takes an
authorized leave of absence or incurs a temporary disability so the regular
monthly installment payments cannot be made on a payroll deduction basis, the
Participant will be required to make the regular payments of principal and
interest at the time and place established by the Plan Administrator.
14.11 If any time prior to the full repayment of a loan, the
Participant or Beneficiary should cease to be a party in interest, or the Plan
should terminate, or any event of default otherwise occurs under the documents
evidencing the loan; the unpaid balance owed by the Participant on the loan
shall be due and payable in full immediately without notice or demand. If the
Participant or
XIV-4
Beneficiary does not repay the full amount of the unpaid balance within the time
established by the Plan Administrator, the Plan Administrator may take whatever
steps it deems necessary to collect the unpaid balance of the loan; provided,
however, in no event shall an "offset" to the Participant's Accounts occur prior
to the date the Participant would otherwise be entitled to a distribution of his
Deferred Contributions Account.
14.12 Notwithstanding anything to the contrary contained
herein, each loan shall be made only in accordance with the regulations and
rulings of the Internal Revenue Service and other applicable state or federal
laws. The Plan Administrator shall act in its sole discretion to ascertain
whether the requirement of such laws, regulations, and rulings have been met.
IN WITNESS WHEREOF, the Company has caused its duly authorized
officer to execute this Amendment on this , 1996, effective for all purposes as
provided above.
SANTA FE ENERGY RESOURCES, INC.
By:
Name:
Title:
XIV-5
ATTACHMENT A
SANTA FE ENERGY RESOURCES
SAVINGS INVESTMENT PLAN
INVESTMENT FUNDS
1. Putman Stable Value Fund (and certain guaranteed investment contracts
issued by the Travelers Insurance Company)
2. INVESCO Total Return Fund
3. Putman Fund for Growth and Income A
4. Putman S&P 500 Index Fund
5. Putman Voyager Fund A
6. Putman Overseas Growth Fund A
7. Putman New Opportunities Fund A
8. Santa Fe Energy Resources (Company) Stock Fund
