As filed with the Securities and Exchange Commission on August 14, 1997
Registration No. 333-_______
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Praxair, Inc.
------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-1249050
------------------------ ---------------------------------
(State of incorporation) (IRS Employer Identification No.)
39 Old Ridgebury Road, Danbury, CT 06810-5113
------------------------------------------------
(Address of principal executive offices)
Praxair Distribution, Inc.
401(k) Retirement Plan
------------------------------------------------
(Full title of the plan)
David H. Chaifetz
Vice President, General Counsel and Secretary
Praxair, Inc.
39 Old Ridgebury Road,
Danbury, CT 06810-5113
------------------------------------------------
(Name and address of agent for service)
(203) 837-2000
------------------------------------------------
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================================
Title of Securities to Amount to be Proposed maximum Proposed maximum Amount of
be registered(1) registered offering price per share(2) aggregate offering price(2) registration fee
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 100,000 Shares $53.25 $5,325,000 $1,613.64
$.01 par value
=======================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, the
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 in
accordance with Rule 457(c) and (h) under the Securities Act of 1933, as amended
on the basis of the average of the high and low prices reported in the
consolidated reporting system on August 12, 1997.
Exhibit Index is located at page II-8
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing information specified by Part I of this
Form S-8 Registration Statement (the "Registration Statement") will be sent or
given to participants in the Praxair Distribution, Inc. 401(k) Retirement Plan
(the "Plan"), as specified in Rule 428(b)(1) promulgated by the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"). Praxair Distribution, Inc. is a wholly owned
subsidiary of Praxair, Inc., a Delaware corporation. Such document(s) are not
being filed with the Commission but constitute (along with the documents
incorporated by reference into the Registration Statement pursuant to Item 3 of
Part II hereof), a prospectus that meets the requirements of Section 10(a) of
the Securities Act.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents have been filed by Praxair, Inc. (the
"Registrant") with the Commission pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act") and are hereby incorporated by reference
in this Registration Statement:
(a) The description of the Registrant's Common Stock, $.01 par
value, contained in the Registrant's Registration Statement on Form 10 (File No.
1-11037), filed with the Commission on March 10, 1992, as amended by Form 8,
dated May 22, 1992, Form 8, dated June 9, 1992, and Form 8, dated June 12, 1992.
(b) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996, which contains audited financial statements for the most
recent year for which such statements have been filed.
(c) All documents subsequently filed by the Registrant with the
Commission pursuant to Sections 13(a), 13(c), 14, or 15(d) of the 1934 Act,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part thereof from the date of filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Section 145 of the General Corporation Law of
the State of Delaware (the "DGCL"), which provides for indemnification of
directors, officers and other employees in certain circumstances, and to Section
102(b)(7) of the DGCL, which provides for the elimination or limitation of the
personal liability for monetary damages of directors under certain
circumstances. Article VIII of the Restated Certificate of Incorporation of the
Registrant eliminates the personal liability for monetary damages of directors
under certain circumstances and provides indemnification to directors and
officers of the Registrant to the fullest extent permitted by the DGCL. Among
other things, these provisions provide indemnification for officers and
directors against liabilities for judgments in and settlements
II-1
<PAGE>
of lawsuits and other proceedings and for the advance and payment of fees and
expenses reasonably incurred by the director or officer in defense of any such
lawsuit or proceeding.
The directors and officers of the Registrant are covered by
insurance policies indemnifying against certain liabilities, including certain
liabilities, arising under the Securities Act of 1933, which might be incurred
by them in such capacities and against which they may not be indemnified by the
Corporation.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
Exhibit
NUMBER DESCRIPTION
4.1 The Praxair Distribution, Inc. 401 (k) Retirement Plan
4.2 Article IV of the Registrant's Restated Certificate of
Incorporation, defining the rights of holders of the capital stock
of the Registrant (incorporated herein by reference to Appendix
A to the Registrant's Information Statement, filed as Exhibit 2.01
to the Registrant's Registration Statement on Form 10 (File No.
1-11037), filed with the Commission on March 10, 1992, as
amended by Form 8, dated May 22, 1992, Form 8, dated June 9,
1992, and Form 8, dated June 12, 1992)
4.3 Form of Rights Agreement between the Registrant and The Bank of New
York, as Rights Agent (incorporated herein by reference to Exhibit
4.02 to the Registrant's Registration Statement on Form 10 (File No.
1-11037), filed with the Commission on March 10, 1992, as amended by
Form 8, dated May 22, 1992, Form 8, dated June 9, 1992, and Form 8,
dated June 12, 1992)
5 Opinion of Kelley Drye & Warren LLP, Counsel to Registrant
23.1 Consent of Price Waterhouse, Independent Auditors
23.2 Consent of Kelley Drye & Warren LLP (included in opinion filed
as Exhibit 5)
24 Powers of Attorney of Directors and Certain Officers of the
Registrant (included on the signature pages hereof)
II-2
<PAGE>
ITEM 9. UNDERTAKINGS.
THE UNDERSIGNED REGISTRANT HEREBY UNDERTAKES:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to include
any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and the price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and (iii) to include any material information
with respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement; provided, however, that subparagraphs (i) and (ii) do
not apply if the information required to be included in a post-effective
amendment by those subparagraphs is contained in periodic reports filed by the
Company pursuant to Section 13 or 15(d) of the 1934 Act that are incorporated by
reference in the Registration Statement; provided, however, that paragraphs
(a)(1)(i) and (a)(1)(ii) above do not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for the purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Sections 13(a) or 15(d) of the 1934 Act (and where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the 1934
Act), that it is incorporated by reference in the Registration Statement shall
be deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE>
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions described in Item 6 of
this Registration Statement, or otherwise, the Registrant has been advised that
in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(6) The undersigned Registrant hereby undertakes that the Registrant
will take the necessary actions to submit the Praxair Distribution, Inc. 401(k)
Retirement Plan to the Internal Revenue Service (the "IRS") in a timely manner
and will make all changes required by the IRS to qualify the Plan.
II-4
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Act of
1933, as amended, the Praxair Distribution, Inc. 401 (k) Retirement Plan has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Danbury, State of
Connecticut on the 18th day of July, 1997.
By JOHN A. CLERICO
-------------------------------------------
John A. Clerico
Vice President and Chief Financial Officer
(On behalf of the Plan and as
Principal Financial Officer)
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 Danbury, State of Connecticut on this 18th day of
July, 1997.
PRAXAIR, INC.
By: J. ROBERT VIPOND
-------------------------------------------
J. Robert Vipond
Vice President and
Controller
(On behalf of the Registrant
and as Principal Accounting Officer).
POWER OF ATTORNEY
Each person whose signature appears below appoints each of David H.
Chaifetz and John A. Clerico, his attorney-in-fact and agent, with full power of
substitution and resubstitution, to sign and file with the Securities and
Exchange Commission, any amendments to this Registration Statement (including
post-effective amendments), and generally to do anything else necessary or
proper in connection therewith.
II-5
<PAGE>
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 date indicated.
SIGNATURE TITLE DATE
H. WILLIAM LICHTENBERGER Chairman and Chief July 22, 1997
- ----------------------------- Executive Officer
H. William Lichtenberger (Principal Executive Officer)
JOHN A. CLERICO Vice President, Chief July 18, 1997
- ----------------------------- Financial Officer,
John A. Clerico and Director (Principal
Financial Officer)
EDGAR G. HOTARD President and Director July 22, 1997
- -----------------------------
Edgar G. Hotard
ALEJANDRO ACHAVAL Director July 22, 1997
- -----------------------------
Alejandro Achaval
C. FRED FETTEROLF Director July 22, 1997
- -----------------------------
C. Fred Fetterolf
DALE F. FREY Director July 22, 1997
- -----------------------------
Dale F. Frey
CLAIRE W. GARGALLI Director July 22, 1997
- -----------------------------
Claire W. Gargalli
RONALD L. KUEHN JR. Director July 22, 1997
- -----------------------------
Ronald L. Kuehn Jr.
RAYMOND W. LEBOEUF Director July 22, 1997
- -----------------------------
Raymond W. LeBoeuf
II-6
<PAGE>
BENJAMIN F. PAYTON Director July 22, 1997
- -----------------------------
Benjamin F. Payton
G. JACKSON RATCLIFFE, JR. Director July 22, 1997
- -----------------------------
G. Jackson Ratcliffe, Jr.
H. MITCHELL WATSON, JR. Director July 22, 1997
- -----------------------------
H. Mitchell Watson, Jr.
II-7
<PAGE>
EXHIBIT INDEX
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------- ----------- ----------
4.1 Praxair Distribution, Inc. 401 (k) Retirement
Plan
4.2 Article IV of the Registrant's Restated Incorporated by
Certificate of Incorporation, defining the reference
rights of holders of the capital stock of the
Registrant(incorporated herein by reference
to Appendix A to the Registrant's Information
Statement, filed as Exhibit 2.01 to the
Registrant's Registration Statement on Form 10
(File No. 1-11037), filed with the Commission
on March 10, 1992, as amended by Form 8, dated
May 22, 1992, Form 8, dated June 9, 1992, and
Form 8, dated June 12, 1992)
4.3 Form of Rights Agreement between the Incorporated by
Registrant and The Bank of New York, as reference
Rights Agent (incorporated herein by reference
to Exhibit 4.02 to the Registrant's Registration
Statement on Form 10 (File No. 1-11037), filed
with the Commission on March 10, 1992, as amended
by Form 8, dated May 22, 1992, Form 8, dated
June 9, 1992, and Form 8, dated June 12, 1992)
5 Opinion of Kelley Drye & Warren LLP,
Counsel to Registrant
23.1 Consent of Price Waterhouse, Independent
Auditors
23.2 Consent of Kelley Drye & Warren LLP
(included in opinion filed as Exhibit 5)
24 Powers of Attorney of Directors and Certain
Officers of the Registrant (included on the
signature pages hereof)
II-8
Your plan is an important legal document. This sample plan has been prepared
based on our understanding of the desired provisions. It may not fit your
situation. You should consult with your lawyer on the plan's legal and tax
implications. Neither Principal Mutual Life Insurance Company nor its agents can
be responsible for the legal or tax aspects of the plan nor its appropriateness
for your situation. If you wish to change the provisions of this sample plan,
you may ask us to prepare new sample wording for you and your lawyer to review.
1
<PAGE>
PRAXAIR DISTRIBUTION, INC.
401(K) RETIREMENT PLAN
Defined Contribution Plan 7.7
Restated as of August 1, 1997
2
<PAGE>
TABLE OF CONTENTS
INTRODUCTION
ARTICLE I FORMAT AND DEFINITIONS
Section 1.01 Format
Section 1 02 Definitions
ARTICLE II PARTICIPATION
Section 2.01 Active Participant
Section 2.02 Inactive Participant
Section 2.03 Cessation of Participation
Section 2.04 Adopting Employer - Single Plan
ARTICLE III CONTRIBUTIONS
Section 3.01 Employer Contributions
Section 3.01A Voluntary Contributions by Participants
Section 3.01B Rollover Contributions
Section 3.01C Deductible Contributions by Participant
Section 3.02 Forfeitures
Section 3.03 Allocation
Section 3.04 Contribution Limitation
Section 3.05 Excess Amounts
ARTICLE IV INVESTMENT OF CONTRIBUTIONS
Section 4.01 Investment of Contributions
Section 4.01A Investment in Qualifying Employer Securities
Section 4.01B Limitation on Investment in Qualifying Employer
Securities by Some Participants
Section 4.01C Dividends, Rights, Warrants and Scrip
Section 4.02 Purchase of Insurance
Section 4.03 Transfer of Ownership
Section 4.04 Termination of Insurance
ARTICLE V BENEFITS
Section 5.01 Retirement Benefits
Section 5.02 Death Benefits
Section 5.03 Vested Benefits
Section 5.04 When Benefits Start
Section 5.05 Withdrawal Privileges
Section 5.06 Loans to Participants
3
<PAGE>
ARTICLE Vl DISTRIBUTION OF BENEFITS
Section 6.01 Automatic Forms of Distribution
Section 6.02 Optional Forms of Distribution and Distribution
Requirements
Section 6.02B Distributions in Qualifying Employer Securities
Section 6.03 Election Procedures
Section 6.04 Notice Requirements
ARTICLE VII TERMINATION OF PLAN
ARTICLE VIII ADMINISTRATION OF PLAN
Section 8.01 Administration
Section 8.02 Records
Section 8.03 Information Available
Section 8.04 Claim and Appeal Procedures
Section 8.05 Unclaimed Vested Account Procedure
Section 8.06 Delegation of Authority
ARTICLE IX GENERAL PROVISIONS
Section 9.01 Amendments
Section 9.02 Direct Rollovers
Section 9.03 Mergers and Direct Transfers
Section 9.04 Provisions Relating to the Insurer and Other
Parties
Section 9.05 Employment Status
Section 9.06 Rights to Plan Assets
Section 9.07 Beneficiary
Section 9.08 Nonalienation of Benefits
Section 9.09 Construction
Section 9.10 Legal Actions
Section 9.11 Small Amounts
Section 9.12 Word Usage
Section 9.13 Transfers Between Plans
Section 9 14 Qualification of Plan
ARTICLE X TOP-HEAVY PLAN REQUIREMENTS
Section 10.01 Application
Section 10.02 Definitions
Section 10.03 Modification of Vesting Requirements
Section 10.04 Modification of Contributions
Section 10 05 Modification of Contribution Limitation
ARTICLE Xl MERGER AND ACCOUNT BALANCES
PLAN EXECUTION
4
<PAGE>
INTRODUCTION
Genex, LTD previously established a 401 (K) profit sharing plan on
March 1, 1989.
The restatement effective March 1, 1989, is set forth in this document
and is substituted in lieu of the prior document. The restatement has now been
amended with four amendments.
The Plan was subsequently adopted by Praxair Distribution, Inc. Praxair
Distribution, Inc. is now the Primary Employer.
All Eligible Employees are eligible to participate in this Plan.
However, Eligible Employees who are given the option to continue participation
in the Praxair Inc. Pension Plan and who elect in writing to do so shall not be
eligible to receive the Points-Based Additional Contribution or the company
Discretionary Contribution.
Union employees are not eligible to participate in this Plan unless the
Plan specifically provides for their coverage.
It is intended that the restated 401 (k) profit sharing plan qualify as
a profit sharing plan under the Internal Revenue Code of 1986, including any
later amendments to the Code. The Employer agrees to operate the plan according
to the terms, provisions and conditions set forth in this document.
5
<PAGE>
ARTICLE I
FORMAT AND DEFINITIONS
SECTION 1.01--FORMAT.
Words and phrases defined in the DEFINITIONS SECTION of Article I shall
have that defined meaning when used in this Plan, unless the context clearly
indicates otherwise.
These words and phrases have an initial capital letter to aid in
identifying them as defined terms.
SECTION 1.02--DEFINITIONS.
ACCOUNT means, for a Participant, the sum of the cash value of any
Insurance Policy for him plus his share of the Investment Fund. Separate
accounting records are kept for those parts of his Account that result from:
a) Voluntary Contributions.
b) Deductible Contributions by Participants (made prior to
January 1, 1987).
c) Elective Deferral Contributions.
d) Matching Contributions.
e) Other Employer Contributions
If the Employer elects to include any of these Contributions in
computing the percentages in the EXCESS AMOUNTS SECTION of Article III, a
separate accounting record shall be kept for any part of his Account resulting
from such Employer Contributions.
f) Rollover Contributions.
If the Participant's Vesting Percentage is less than 100% as to any of
the Employer Contributions, a separate accounting record will be kept for any
part of his Account resulting from such Employer Contributions and, if there has
been a prior Forfeiture Date, from such Contributions made before a prior
Forfeiture Date.
A Participant's Account shall be reduced by any distribution of his
Vested Account and by any Forfeitures. A Participant's Account will participate
in the earnings credited, expenses charged and any appreciation or depreciation
of the Investment Fund. His Account is subject to any minimum guarantees
applicable under the Group Contract or other investment arrangement.
ACCRUAL SERVICE means one year of service for each Accrual Computation Period in
which an Employee is credited with at least 1,000 Hours-of-Service.
However, Accrual Service is modified as follows:
Predecessor Employer Service included:
6
<PAGE>
For purposes of Points-Based Additional Contributions, an Employee's
service with a Predecessor Employer shall be included. This service
shall include the number of full years and full months at any of the
companies listed in the definition of Predecessor Employer, from the
date of hire to the effective date of the company's merger into the
Primary Employer or an Adopting Employer, as was listed on the payroll
records of the Predecessor Employer.
Period of Military Service included:
A Period of Military Service shall be included as service with the
Employer to the extent it has not already been credited. For purposes
of crediting Hours-of-Service during the Period of Military Duty, an
Hour-of-Service shall be credited (without regard to the 501
Hour-of-Service limitation) for each hour an Employee would normally
have been scheduled to work for the Employer during such Period.
ACCRUAL COMPUTATION PERIOD means a 12-consecutive month period ending
on (i) each March 31 through (ii) March 31, 1994, and (iii) each 12-consecutive
month period ending on each December 31.
ACTIVE PARTICIPANT means an Eligible Employee who is actively
participating in the Plan according to the provisions in the ACTIVE PARTICIPANT
SECTION of Article II.
ADDITIONAL CONTRIBUTIONS means additional contributions made by the
Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article
III.
ADOPTING EMPLOYER means an employer controlled by or affiliated with
the Employer and listed in the ADOPTING EMPLOYERS - SINGLE PLAN SECTION of
Article II.
AFFILIATED SERVICE GROUP means any group of corporations, partnerships
or other organizations of which the Employer is a part and which is affiliated
within the meaning of Code Section 414(m) and regulations thereunder. Such a
group includes at least two organizations one of which is either a service
organization (that is, an organization the principal business of which is
performing services), or an organization the principal business of which is
performing management functions on a regular and continuing basis. Such service
is of a type historically performed by employees. In the case of a management
organization, the Affiliated Service Group shall include organizations related,
within the meaning of Code Section 144(a)(3), to either the management
organization or the organization for which it performs management functions. The
term Controlled Group, as it is used in this Plan, shall include the term,
Affiliated Service Group
ANNUAL COMPENSATION means, on any given date, the Employee's
Compensation for the latest Compensation Year ending on or before the given
date.
7
<PAGE>
ANNUITY STARTING DATE means, for a Participant, the first day of the
first period for which an amount is payable as an annuity or any other form.
BENEFICIARY means the person or persons named by a Participant to
receive any benefits under this Plan upon the Participant's death. See the
BENEFICIARY SECTION of Article IX.
CLAIMANT means any person who has made a claim for benefits under this
Plan. See the CLAIM AND APPEAL PROCEDURES SECTION of Article VIII.
CODE means the Internal Revenue Code of 1986, as amended.
COMPENSATION means, except as modified in this definition, the total
earnings paid or made available to an Employee by the Employer during any
specified period.
"Earnings" in this definition means Compensation as defined in the
CONTRIBUTION LIMITATION SECTION of Article III.
Compensation shall also include elective contributions. Elective
contributions are amounts excludable from the Employee's gross income under Code
Sections 125, 402(e)(3), 402(h) or 403(b), and contributed by the Employer, at
the Employee's election, to a Code Section 401(k) arrangement, a simplified
employee pension, cafeteria plan or tax-sheltered annuity. Elective
contributions also include Compensation deferred under a Code Section 457 plan
maintained by the Employer and Employee contributions "picked up" by a
governmental entity and, pursuant to Code Section 414(h)(2), treated as Employer
contributions.
For purposes of the EXCESS AMOUNTS SECTION of Article III, the Employer
may elect to use an alternative nondiscriminatory definition of Compensation in
accordance with the regulations under Code Section 414(s).
For purposes of determining the amount of Elective Deferral
Contributions, Compensation shall exclude reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving expenses; deferred
compensation and welfare benefits.
For purpose of determining the allocation or amount of Points-Based
Additional Contributions the following shall be excluded from compensation:
bonuses
overtime pay
other special compensation
any compensation other than base pay and commissions
For Plan Years beginning after December 31, 1988, and before January 1,
1994, the annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any year shall not exceed
$200,000. For Plan Years beginning on or
8
<PAGE>
after January 1, 1994, the annual Compensation of each Participant taken into
account for determining all benefits provided under the Plan for any year shall
not exceed $150,000.
The $200,000 limit shall be adjusted by the Secretary at the same time
and in the same manner as under Code Section 415(d). The $150,000 limit shall
be adjusted by the Commissioner for increases in the cost of living in
accordance with Code Section 401 (a)(17)(B). The cost of living adjustment in
effect for a calendar year applies to any period, not exceeding 12 months, over
which pay is determined (determination period) beginning in such calendar year.
If a determination period consists of fewer than 12 months, the annual
compensation limit will be multiplied by a fraction, the numerator of which is
the number of months in the determination period, and the denominator of which
is 12.
In determining the Compensation of a Participant for purposes of the
annual compensation limit, the rules of Code Section 414(q)(6) shall apply,
except that in applying such rules, the term "family" shall include only the
spouse of the Participant and any lineal descendants of the Participant who have
not attained age 19 before the close of the year. If, as a result of the
application of such rules the adjusted annual compensation limit is exceeded,
then (except for purposes of determining the portion of Compensation up to the
integration level if this Plan provides for permitted disparity) the limitation
shall be prorated among the affected individuals in proportion to each such
individual's Compensation as determined under this definition prior to the
application of this limitation.
If Compensation for any prior determination period is taken into
account in determining a Participant's benefits accruing in the current Plan
Year, the Compensation for that prior determination period is subject to the
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1989, which are used to
determine benefits in Plan Years beginning after December 31, 1988 and before
January 1, 1994, the annual compensation limit is $200,000. For this purpose,
for determination periods beginning before the first day of the first Plan Year
beginning on or after January 1, 1994, which are used to determine benefits in
Plan Years beginning on or after January 1, 1994, the annual compensation limit
is $150,000.
Compensation means for an Employee who is a Leased Employee the
Employee's Compensation for the services he performs for the Employer determined
in the same manner as the Compensation of Employees who are not Leased Employees
regardless of whether such Compensation would be received directly from the
Employer or from the leasing organization.
COMPENSATION YEAR means each one-year period ending on the last day of
the Plan Year including corresponding periods before March 1, 1989 (the last day
of the Plan Year before January 1, 1994).
CONTINGENT ANNUITANT means an individual named by the Participant to
receive a lifetime benefit after the Participant's death in accordance with a
survivorship life annuity.
9
<PAGE>
CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Additional Contributions
Discretionary Contributions
Points-Base Additional Contribution
Voluntary Contributions
Rollover Contribution
as set out in Article III, unless the context clearly indicates otherwise.
CONTROLLED GROUP means any group of corporations, trades or businesses
of which the Employer is a part that are under common control. A Controlled
Group includes any group of corporations trades or businesses whether or not
incorporated which is either a parent-subsidiary group a brother-sister group or
a combined group within the meaning of Code Section 414(b) Code Section 414(c)
and regulations thereunder and for purposes of determining contribution
limitations under the CONTRIBUTION LIMITATION SECTION of Article III as modified
by Code Section 415(h) and for the purpose of identifying Leased Employees as
modified by Code Section 414(a)(3). The term Controlled Group as it is used in
this Plan shall include the term Affiliated Service Group and any other employer
required to be aggregated with the Employer under Code Section 414(o) and the
regulations thereunder.
DIRECT ROLLOVER means a payment by the Plan to the Eligible Retirement
Plan specified by the Distributee.
DISCRETIONARY CONTRIBUTIONS means discretionary contributions made by
the Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of
Article III.
DISTRIBUTEE means an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's or former
Employee's spouse or former spouse who is the alternate payee under a qualified
domestic relations order as defined in Code Section 414(p) are Distributees with
regard to the interest of the spouse or former spouse.
EARLY RETIREMENT DATE means the first day of any month before a
Participant's Normal Retirement Date which the Participant selects for the start
of his retirement benefit. This day shall be on or after the date on which he
ceases to be an Employee and the date he meets the following requirement(s):
a) He has attained age 55.
b) He has completed 6 years (before January 1, 1992, 10 years) of
Vesting Service.
ELECTIVE DEFERRAL CONTRIBUTIONS means Contributions made by the
Employer to fund this Plan in accordance with a qualified cash or deferred
arrangement as
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described in Code Section 401(k). See the EMPLOYER CONTRIBUTIONS SECTION of
Article III.
ELIGIBILITY BREAK IN SERVICE means an Eligibility Computation Period in
which an Employee is credited with 500 or fewer Hours-of-Service. An Employee
incurs an Eligibility Break in Service on the last day of an Eligibility
Computation Period in which he has an Eligible Break in Service.
ELIGIBILITY COMPUTATION PERIOD means a 12-consecutive month period. The
first Eligibility Computation Period begins on an Employee's Employment
Commencement Date. Later Eligibility Computation Periods shall be 12-consecutive
month periods ending on the last day of each Plan Year that begins after his
Employment Commencement Date.
To determine an Eligibility Computation Period after an Eligibility
Break in Service, the Plan shall use the 12-consecutive month period beginning
on an Employee's Reemployment Commencement Date as if his Reemployment
Commencement Date were his Employment Commencement Date.
ELIGIBILITY SERVICE means one year of service for each Eligibility
Computation Period that has ended and in which an Employee is credited with at
least 1,000 Hours-of-Service.
However, Eligibility Service is modified as follows:
Predecessor Employer service included:
For purposes of Points-Based Additional Contributions, an Employee's
service with a Predecessor Employer shall be included. This service
shall include the number of full years and full months at any of the
companies listed in the definition of Predecessor Employer, from the
date of hire to the effective date of the company's merger into the
Primary Employer or an Adopting Employer, as was listed on the payroll
records of the Predecessor Employer.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited. For purposes
of crediting Hours-of-Service during the Period of Military Duty, an
Hour-of-Service shall be credited (without regard to the 501
Hour-of-Service limitation) for each hour an Employee would normally
have been scheduled to work for the Employer during such period.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
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ELIGIBLE EMPLOYEE means any Employee of the Employer or of an Adopting
Employer who meets the following requirement. His employment classification with
the Employer is one of the following:
Represented for collective bargaining purposes by United Electrical
Radio and Machine Workers of America (UK) Local No. 1139.
Nonbargaining class (not represented for collective bargaining purposes
by a bargaining unit which has bargained in good faith with the Employer on the
subject of retirement benefits).
On and after January 1, 1997, Employees represented for collective
bargaining purposes by Teamsters Local 1110.
On and after February 1, 1997, Employees represented for collective
bargaining purposes by Teamsters Local 294.
ELIGIBLE RETIREMENT PLAN means an individual retirement account
described in Code Section 408(a), an individual retirement annuity described in
Code Section 408 (b), an annuity plan described in Code Section 403(a) or a
qualified trust described in Code Section 401(a), 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.
ELIGIBLE ROLLOVER DISTRIBUTION means 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:
(a) Any distribution that is one of a series of substantially
equal periodic payment (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.
(b) Any distribution to the extent such distribution is required
under Code Section 401 (a)(9).
(c) 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).
EMPLOYEE means an individual who is employed by the Employer, Adopting
Employer or any other employer required to be aggregated with the Employer under
Code Sections 414(b), (c), (m) or (o). A Controlled Group member is required to
be aggregated with the Employer.
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The term Employee shall also include any Leased Employee deemed to be
an employee of any employer described in the preceding paragraph as provided in
Code Sections 414(n) or 414(o).
EMPLOYER means the Primary Employer and any Adopting Employer. This
will also include any successor corporation or firm of the Employer which shall,
by written agreement, assume the obligations of this Plan or any predecessor
corporation or firm of the Employer (absorbed by the Employer, or of which the
Employer was once a part) which became a predecessor because of a change of
name, merger, purchase of stock or purchase of assets and which maintained this
Plan
EMPLOYER CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Additional Contributions
Discretionary Contributions
Points-Based Additional Contributions
as set out in Article III, unless the context clearly indicates otherwise.
EMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs
an Hour-of-Service.
ENTRY DATE means the date an Employee first enters the Plan as an
Active Participant. See the ACTIVE PARTICIPANT SECTION of Article II
FAMILY MEMBER means an individual described in Code Section
414(q)(6)(B).
FISCAL YEAR means the Primary Employer's taxable year. The last day of
the Fiscal Year is December 31.
FORFEITURE means the part, if any, of a Participant's Account that is
forfeited. See the FORFEITURES SECTION of Article III.
FORFEITURE DATE means, as to a Participant, the date the Participant
incurs five consecutive Vesting Breaks in Service. A Participant incurs a
Vesting Break in Service on the last day of the period used to determine The
Vesting Break in Service.
This is the date on which the Participant's Nonvested Account will be
forfeited unless an earlier forfeiture occurs as provided in the FORFEITURES
SECTION of Article III.
GROUP CONTRACT means the group annuity contract or contracts into which
the Trustee enters with the Insurer for the investment of Contributions and the
payment of benefits
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under this Plan. The term Group Contract as it is used in this Plan is deemed to
include the plural unless the context clearly indicates otherwise.
HIGHLY COMPENSATED EMPLOYEE means a highly compensated active Employee
or a highly compensated former Employee.
A highly compensated active Employee means any Employee who performs
service for the Employer during the determination year and who, during the
look-back year:
a) received compensation from the Employer in excess of $575,000 (as
adjusted pursuant to Code Section 415(d)):
b) received compensation from the Employer in excess of $550,000 (as
adjusted pursuant to Code Section 415(d)) and was a member of
the top-paid group for such Year; or
c) was an officer of the Employer and received compensation during
such year that is greater than 50 percent of the dollar
limitation in effect under Code Section 415(b)(1)(A).
The term Highly Compensated Employee also means:
d) 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
e) Employees who are 5 percent owners at any time during the
look-back year or determination year.
If no officer has satisfied the compensation requirement of (c) 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 means 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
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Employee who is one of the 10 most highly compensated Employees ranked on the
basis of compensation paid by the Employer 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 definition,
family member includes the spouse, lineal ascendants and descendants of the
Employee or former Employee and the spouses of such 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 Employees, the number of Employees treated as officers and
the compensation that is considered, will be made in accordance with Code
Section 414(q) and the regulations thereunder.
HOUR-OF-SERVICE means the following:
a) Each hour for which an Employee is paid, or entitled to payment
for performing duties for the Employer during the applicable
computation Period.
b) Each hour for which an Employee is paid, or entitled to payment,
by the Employer because of a period of time in which no duties
are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military
duty or leave of absence. Notwithstanding the preceding
provisions of this subparagraph (b), no credit will be given to
the Employee
1. for more than 501 Hours-of-Service under this subparagraph
(b) because of any single continuous period in which the
Employee performs no duties (whether or not such period
occurs in a single computation period); or
2. for an Hour-of-Service for which the Employee is directly or
indirectly paid, or entitled to payment, because of a period
in which no duties are performed if such payment is made or
due under a plan maintained solely for the purpose of
complying with applicable worker's or workmen's
compensation, or unemployment compensation or disability
insurance laws; or
3. for an Hour-of-Service for a payment which solely reimburses
the Employee for medical or medically related expenses
incurred by him.
For purposes of this subparagraph (b), a payment shall be deemed
to be made by, or due from the Employer, regardless of whether
such payment is made by, or due from the Employer, directly or
indirectly through, among others, a trust fund or insurer, to
which the Employer contributes or pays premiums and regardless of
15
<PAGE>
whether contributions made or due to the trust fund, insurer or
other entity are for the benefit of particular employees or are
on behalf of a group of employees in the aggregate.
c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same
Hours-of-Service shall not be credited under both subparagraph
(a) or subparagraph (b) above (as the case may be) and under this
subparagraph (c) Crediting of Hours-of-Service for back pay
awarded or agreed to with respect to periods described in
subparagraph (b) above will be subject to the limitations set
forth in that subparagraph.
The crediting of Hours-of-Service above shall be applied under the
rules of paragraphs (b) and (c) of the Department of Labor Regulation
2530.200b-2 (including any interpretations or opinions implementing said rules);
which rules, by this reference, are specifically incorporated in full within
this Plan. The reference to paragraph (b) applies to the special rule for
determining hours of service for reasons other than the performance of duties
such as payments calculated (or not calculated) on the basis of units of time
and the rule against double credit. The reference to paragraph (c) applies to
the crediting of hours of service to computation periods.
Hours-of-Service shall be credited for employment with any other
employer required to be aggregated with the Employer under Code Sections 414(b),
(c), (m) or (o) and the regulations thereunder for purposes of eligibility and
vesting. Hours-of-Service shall also be credited for any individual who is
considered an employee for purposes of this Plan pursuant to Code Section 414(n)
or Code Section 414(o) and the regulations thereunder.
Solely for purposes of determining whether a one year break in service
has occurred for eligibility or vesting purposes, during a Parental Absence an
Employee shall be credited with the Hours-of-Service which otherwise would
normally have been credited to the Employee but for such absence, or in any case
in which such hours cannot be determined, eight Hours-of-Service per day of such
absence. The Hours-of-Service credited under this paragraph shall be credited in
the computation period in which the absence begins if the crediting is necessary
to prevent a break in service in that period; or in all other cases, in the
following computation period.
INACTIVE PARTICIPANT means a former Active Participant who has an
Account. See the INACTIVE PARTICIPANT SECTION of Article II
INSURANCE POLICY means, for a Participant, the life insurance policy
or policies on his life issued by the Insurer as provided in Article IV. The
term Insurance Policy as it is used in this Plan is deemed to include the plural
unless the context clearly indicates otherwise.
INSURER means Principal Mutual Life Insurance Company and any other
insurance company or companies named by the Trustee or Primary Employer.
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<PAGE>
INVESTMENT FUND means the total assets, excluding the cash values of
any Insurance Policy, held for the purpose of providing benefits for
participants. These funds result from Contributions made under the Plan.
INVESTMENT MANAGER means any fiduciary (other than a trustee or Named
Fiduciary)
a) who has the power to manage, acquire, or dispose of any assets of
the Plan; and
b) who (1) is registered as an investment adviser under the
Investment Advisers Act of 1940, or (2) is a bank as defined in
the Investment Advisers Act of 1940, or (3) is an insurance
company qualified to perform services described in subparagraph
(a) above under the laws of more than one state; and
c) who has acknowledged in writing being a fiduciary with respect to
the Plan.
LATE RETIREMENT DATE means the first day of any month which is after a
Participant's Normal Retirement Date and on which retirement benefits begin. If
a Participant continues to work for the Employer after his Normal Retirement
Date, his Late Retirement Date shall be the earliest first day of the month on
or after he ceases to be an Employee. An earlier or a later Retirement Date may
apply if the Participant so elects. An earlier Retirement Date may apply if the
Participant is age 70 1/2. See the WHEN BENEFITS START SECTION of Article V.
LEASED EMPLOYEE means any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are of a type historically performed by employees in the
business field of the recipient employer. Contributions or benefits provided a
Leased Employee by the leasing organization which are attributable to service
performed for the recipient employer shall be treated as provided by the
recipient employer.
A Leased Employee shall not be considered an employee of the recipient
if:
a) such employee is covered by a money purchase pension plan
providing (1) a nonintegrated employer contribution rate of at
least 10 percent of compensation, as defined in Code Section
415(c)(3), but including amounts contributed pursuant to a salary
reduction agreement which are excludable from the employee's
gross income under Code Sections 125,402(e)(3), 402(h) or 403(b),
(2) immediate participation, and (3) full and immediate vesting
and
b) Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce.
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LOAN ADMINISTRATOR means the person or positions authorized to
administer the Participant loan program.
The Loan Administrator is U.S. BENEFITS MANAGER.
MATCHING CONTRIBUTIONS means matching contributions made by the
Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article
III.
MONTHLY DATE means each Yearly Date and the same day of each following
month during the Plan Year beginning on such Yearly Date.
NAMED FIDUCIARY means the person or persons who have authority to
control and manage the operation and administration of the Plan.
The Named Fiduciary is the Employer and the Committee.
NONHIGHLY COMPENSATED EMPLOYEE means an Employee of the Employer who is
neither a Highly Compensated Employee nor a Family Member.
NONVESTED ACCOUNT means the part, if any, of a Participant's Account
that is in excess of his Vested Account.
NORMAL FORM means a single life annuity with installment refund.
NORMAL RETIREMENT AGE means the age at which the Participant's normal
retirement benefit becomes nonforfeitable. A Participant's Normal Retirement Age
is the older of age 62 or his age on the date five years after the first day of
the Plan Year in which his Entry Date occurred.
NORMAL RETIREMENT DATE means the earliest first day of the month on or
after the date the Participant reaches his Normal Retirement Age. Unless
otherwise provided in this Plan, a Participant's retirement benefits shall begin
on a Participant's Normal Retirement Date if he has ceased to be an Employee on
such date and has a Vested Account. Even if the Participant is an Employee on
his Normal Retirement Date, he may choose to have his retirement benefit begin
on such date. An earlier Retirement Date may apply if the Participant is age 70
1/2 See the WHEN BENEFITS START SECTION of Article V.
PARENTAL ABSENCE means an Employee's absence from work which begins on
or after the first Yearly Date after December 31, 1984.
a) by reason of pregnancy of the Employee,
b) by reason of birth of a child of the Employee,
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c) by reason of the placement of a child with the Employee in
connection with adoption of such child by such Employee, or
d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
PARTICIPANT means either an Active Participant or an Inactive
Participant.
PARTICIPANT CONTRIBUTIONS means Voluntary Contributions as set out
in Article III.
PERIOD OF MILITARY DUTY means, for an Employee
a) who served as a member of the armed forces of the United States,
and
b) who was reemployed by the Employer at a time when the Employee
had a right to reemployment in accordance with seniority rights
as protected under Section 2021 through 2026 of Title 38 of the
U. S. Code.
the period of time from the date the Employee was first absent from active work
for the Employer because of such military duty to the date the Employee was
reemployed.
PLAN means the 401(k) profit sharing plan of the Employer set forth
in this document, including any later amendments to it.
PLAN ADMINISTRATOR means the person or persons who administer the Plan.
The Plan Administrator is the Employer.
PLAN YEAR means a period beginning on a Yearly Date and ending on the
day before the next Yearly Date.
POINTS-BASED ADDITIONAL CONTRIBUTION means the points-based additional
contribution made by the Employer to fund this Plan. See the EMPLOYER
CONTRIBUTIONS SECTION of Article III.
PREDECESSOR EMPLOYER means the companies as listed below. For purposes
of Points-Based Additional Contributions and, if applicable, Matching
Contributions prior to July 1, 1996, as of the effective date listed next to
each company, an Employee's service for Accrual Service, Eligibility Service and
Vesting Service shall include the number of full years and full months at any of
the following companies from the date of hire until the company's merger into
the Primary Employer or an Adopting Employer, as was listed on the payroll
records of the following companies:
Effective Date
Parry Corporation 01-01-1997
Arizona Welding and Equipment Co. 01-01-1997
Northern Cryogenic and Welding Supply Co. 01-01-1997
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Valley Welding Supply Co. 01-01-1997
(corporation merged into Arizona Welding
and equipment Co. 12/31/1995)
General Welding Supply Co. 07-01-1996
Coulter Welding Supply Co. 01-01-1996
Bob Smith Corporation 10-01-1996
Wilson Welding Oxygen & Supply Co. 11-01-1996
Columbus Welding Equipment Co., Inc. 11-01-1996
Welder and Industrial Service Co. 11-22-1996
Valley Welding Supply Co. 06-02-1997
(corporation merged into Praxair Distribution,
Inc. as of June 2, 1997)
Jay-Ox, Inc. 02-01-1996
Albany Calcium, Inc. 01-01-1997
Liquid Carbonic Industries, Inc. 01-01-1997
PRIMARY EMPLOYER means PRAXAIR DISTRIBUTION, INC. and any successor
thereto and Genex, LTD until its merger into Praxair Distribution, Inc.
QUALIFIED JOINT AND SURVIVOR FORM means for a Participant who has a
spouse, an immediate survivorship life annuity with installment refund, where
the survivorship percentage is 50% and the Contingent Annuitant is the
Participant's spouse. A former Spouse will be treated as the spouse to the
extent provided under a qualified domestic relations order as described in Code
Section 414(p). If a Participant does not have a spouse, the Qualified Joint and
Survivor Form means the Normal Form.
The amount of benefit payable under the Qualified Joint and Survivor
Form shall be the amount of benefit which may be provided by the Participant's
Vested Account.
QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a single life annuity
with installment refund payable to the surviving spouse of a Participant who
dies before his Annuity Starting Date. A former spouse will be treated as the
surviving spouse to the extent provided under a qualified domestic relations
order as described in Code Section 414(p).
QUALIFYING EMPLOYER SECURITY means common stock issued by Praxair, Inc.
QUALIFYING EMPLOYER SECURITIES ACCOUNT means for a Participant, his
share of Qualifying Employer Securities.
REEMPLOYMENT COMMENCEMENT DATE means the date an Employee first
performs an Hour-of-Service following an Eligibility Break in Service.
REENTRY DATE means the date a former Active Participant reenters the
Plan. See the ACTIVE PARTICIPANT SECTION of Article II.
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RETIREMENT DATE means the date a retirement benefit will begin and is a
Participant's Early, Normal or Late Retirement Date, as the case may be.
ROLLOVER CONTRIBUTIONS means the Rollover Contributions which are made
by or for a Participant according to the provisions of the ROLLOVER
CONTRIBUTIONS SECTION of Article III.
SEMI-YEARLY DATE means each Yearly Date and the sixth Monthly Date
after each Yearly Date which is within the same Plan Year.
TEFRA means the Tax Equity and Fiscal Responsibility Act of 1982.
TEFRA COMPLIANCE DATE means the date a plan is to comply with the
provisions of TEFRA. The TEFRA Compliance Date as used in this Plan is,
a) for purposes of contribution limitations, Code Section 415,
1. if the plan was in effect on July 1, 1982, the first
day of the first limitation year which begins after
December 31, 1982, or
2. if the plan was not in effect on July 1, 1982, the
first day of the first limitation year which end after
July 1, 1982.
b) for all other purposes, the first Yearly Date after December 31,
1983.
TOTALLY AND PERMANENTLY DISABLED means that a Participant is disabled,
as a result of sickness or injury, to the extent that he is prevented from
engaging in any substantial gainful activity, and is eligible for and receives a
disability benefit under Title II of the Federal Social Security Act.
TRUST means an agreement of trust between the Primary Employer and
Trustee established for the purpose of holding and distributing the Trust Fund
under the provisions of the Plan. The Trust may provide for the investment of
all or any portion of the Trust Fund in the Group Contract and any Insurance
Policy.
TRUST FUND means the total funds held under the Trust for the purpose
of providing benefits for Participants. These funds result from Contributions
made under the Plan which are forwarded to the Trustee to be deposited in the
Trust Fund.
TRUSTEE means the trustee or trustees under the Trust. The term Trustee
as it is used in this Plan is deemed to include the plural unless the context
clearly indicates otherwise.
VALUATION DATE means the date on which the value of the assets of the
Trust is determined. The value of each Account which is maintained under this
Plan shall be determined
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on the Valuation Date. In each Plan Year, the Valuation Date shall be the close
of each business day.
VESTED ACCOUNT means the vested part of a Participant's Account
including the cash values of any Insurance Policy for him. The Participant's
Vested Account is determined as follows:
If the Participant's Vesting Percentage is 100%, his Vested Account
equals his Account.
If the Participant's Vesting Percentage is less than 100%, his Vested
Account equals the sum of (a) and (b) below:
a) The part of the Participant's Account that results from
Employer Contributions made before a prior Forfeiture Date and
all other Contributions which were 100% vested when made.
b) The balance of the Participant's Account in excess of the
amount in (a) above multiplied by his Vesting Percentage.
If the Participant has withdrawn any part of his Account resulting from
Employer Contributions, other than the vested Employer Contributions included in
(a) above, the amount determined under this subparagraph (b) shall be equal to
P(AB+D) - D as defined below.
P The Participant's Vesting Percentage.
AB The balance of the Participant's Account in excess of the
amount in (a) above.
D The amount of withdrawal resulting from Employer Contributions
other than the vested Employer Contributions included in (a)
above.
The Participant's Vested Account is nonforfeitable.
VESTING BREAK IN SERVICE means a Vesting Computation Period in which an
Employee is credited with 500 or fewer Hours-of-Service. An Employee incurs a
Vesting Break in Service on the last day of a Vesting Computation Period in
which he has a Vesting Break in Service.
VESTING COMPUTATION PERIOD means a 12-consecutive month period ending
on (i) each March 31 through (ii) March 31 1994 and (iii) the 12-consecutive
month period ending on each following December 31.
VESTING PERCENTAGE means the percentage used to determine the
nonforfeitable portion of a Participant's Account attributable to Employer
Contributions which were not 100% vested when made.
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A Participant's Vesting Percentage is shown in the following schedule
opposite the number of whole years of his Vesting Service.
VESTING SERVICE VESTING
(whole years) PERCENTAGE
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
However, the Vesting Percentage for a Participant who is an Employee on
or after the earliest of (i) the date he reaches his Normal Retirement Age (ii)
the date of his death (iii) the date he meets the requirement(s) for an Early
Retirement Date or (iv) the date he becomes Totally and Permanently Disabled
shall be 100% on such date.
If the schedule used to determine a Participant's Vesting Percentage is
changed the new schedule shall not apply to a Participant unless he is credited
with an Hour-of-Service on or after the date of the change and the Participant's
nonforfeitable percentage on the day before the date of the change is not
reduced under this Plan. The amendment provisions of the AMENDMENT SECTION of
Article IX regarding changes in the computation of the Vesting Percentage shall
apply.
VESTING SERVICE means one year of service for each Vesting Computation
Period in which an Employee is credited with at least 1,000 Hours-of-Service.
However, Vesting Service is modified as follows:
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited. For purposes
of crediting Hours-of-Service during the Period of Military Duty, an
Hour-of-Service shall be credited (without regard to the 501
Hour-of-Service limitation) for each hour an Employee would normally
have been scheduled to work for the Employer during such period.
Predecessor Employer service included:
For purposes of Points-Based Additional Contributions, an Employee's
service with a Predecessor Employer shall be included. This service
shall include the number of full years and full months at any of the
companies listed in the definition of Predecessor Employer, from the
date of hire to the effective date of the company's merger into the
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Primary Employer or an Adopting Employer, as was listed on the payroll
records of the Predecessor Employer.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
VOLUNTARY CONTRIBUTIONS means contributions by a Participant that are
not required as a condition of employment or participation or for obtaining
additional benefits from the Employer Contributions. See the VOLUNTARY
CONTRIBUTIONS BY PARTICIPANTS SECTION of Article III.
YEARLY DATE means March 1, 1989, and each following January 1.
YEARS OF SERVICE means an Employee's Vesting Service disregarding any
modifications which exclude service.
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ARTICLE II
PARTICIPATION
SECTION 2.01--ACTIVE PARTICIPANT.
a) For an Eligible Employee who is scheduled to work more than 50%
of the set work hours at his location.
For purposes of Elective Deferral Contributions and
Voluntary Contributions, such an Employee shall first become
an Active Participant (begin active participation in the
Plan) on the earliest date on or after July 1, 1997, on
which he is an Eligible Employee. This date is his Entry
Date for purposes of Elective Deferral and Voluntary
Contributions.
For purposes of Points-Based Contributions, such an Eligible
Employee shall first become an Active Participant (begin
active participation in the Plan) on the earliest Monthly
Date on or after January 1, 1997, on which he is an Eligible
Employee and has completed two years of Eligibility Service.
This date is his Entry Date for purposes of these
contributions.
For an Eligible Employee who is not scheduled to work more than
50% of the set work hours at his location.
For purposes of Elective Deferral Contributions and
Voluntary Contributions, such an Employee shall first become
an Active Participant (begin active participation in the
Plan) on the earliest Monthly Date on or after January 1,
1997, on which he is an Eligible Employee and has completed
one year of Eligibility Service before his Entry Date.
For purposes of Points-Based Contributions, such an Eligible
Employee shall first become an Active Participant (begin
active participation in the Plan) on the earliest Monthly
Date on or after January 1, 1997, on which he is an Eligible
Employee and has completed 2 years of Eligibility Service.
This date is his Entry Date for purposes of these
contributions.
Each Employee who was an Active Participant under the plan
set forth by Altair Gases and Equipment, Inc. shall become
an Active Participant as of July 1, 1996. Each Employee who
was an Active Participant under the plan set forth by
Arizona Welding and Equipment Co. shall become an Active
Participant as of January 1, 1997.
Notwithstanding any provision of this Plan to the contrary,
except for former employees of Liquid Carbonic Industries,
Inc., Employees of Jacksonville Welding Supply, Inc. shall
not be eligible to make Elective Deferral Contributions or
Voluntary Contributions until July 1, 1997.
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An Eligible Employee who has met the eligibility
requirements to become a Participant and is subsequently
transferred to the employment of an Adopting Employer shall
continue to be an Active Participant under this Plan.
If a person has been an Eligible Employee who has met all
the eligibility requirements above, but is not an Eligible
Employee on the date which would have been his Entry Date,
he shall become an Active Participant on the date he again
becomes an Eligible Employee. This date is his Entry Date.
b) An Inactive Participant shall again become an Active
Participant (resume active participation in the Plan) on the
date he again performs an Hour-of-Service as an Eligible
Employee. This date is his Reentry Date.
Upon again becoming an Active Participant, he shall cease to
be an Inactive Participant.
c) A former Participant shall again become an Active
Participant (resume active participation in the Plan) on the
date he again performs an Hour-of-Service as an Eligible
Employee. This date is his Reentry Date.
There shall be no duplication of benefits for a Participant under this
Plan because of more than one period as an Active Participant.
SECTION 2.02--INACTIVE PARTICIPANT.
An Active Participant shall become an Inactive Participant (stop
accruing benefits under the Plan) on the earlier of the following:
a) The date on which he ceases to be an Eligible Employee (on
his Retirement Date if the date he ceases to be an Eligible
Employee occurs within one month of his Retirement Date).
b) The effective date of complete termination of the Plan.
SECTION 2.03--ADOPTING EMPLOYERS - SINGLE PLAN.
Each of the employers controlled by or affiliated with the Employer
and listed below is an Adopting Employer. Each Adopting Employer listed below
participates with the Employer in this Plan. An Adopting Employer's agreement to
participate in this Plan shall be in writing.
If the Adopting Employer did not maintain this Plan before its date of
adoption specified below, its date of adoption shall be the Entry Date for any
of its Employees who have met the requirements in the ACTIVE PARTICIPANT SECTION
of Article II as of that date. Service with and earnings
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from an Adopting Employer shall be included as service with and earnings from
the Employer. Transfer of employment, without interruption, between an Adopting
Employer and another Adopting Employer or the Employer shall not be considered
an interruption of service.
Contributions made by an Adopting Employer shall be treated as
Contributions made by the Employer. Forfeitures arising from those Contributions
shall be used for the benefit of all Participants.
An employer shall not be an Adopting Employer if it ceases to be a
member of a Controlled Group. Such an employer may continue a retirement plan
for its employees in the form of a separate document. This Plan shall be amended
to delete a former Adopting Employer from the list below.
If an employer ceases to be an Adopting Employer and does not continue
a retirement plan for the benefit of its employees, partial termination may
result and the provisions of Article VII apply.
ADOPTING EMPLOYERS
NAME FISCAL YEAR END DATE OF ADOPTION
Praxair Distribution Inc. December 31 January 1, 1996
Altair Gases and Equipment, Inc. March 31 July 1, 1996
Westair Cryogenics Co. December 31 July 1, 1997
Jacksonville Welding Supply, Inc. December 31 January 1, 1997
27
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ARTICLE III
CONTRIBUTIONS
SECTION 3.01--EMPLOYER CONTRIBUTIONS.
Employer Contributions are conditioned on initial qualification of the
Plan. If the Plan is denied initial qualification, the provisions of the
QUALIFICATION Of PLAN SECTION of Article IX shall apply.
Employer Contributions for Plan Years which end on or after March 1,
1989, may be made without regard to current or accumulated net income, earnings.
or profits of the Employer. Before January 1, 1992, Employer Contributions shall
be made from current or accumulated net income, earnings or profits of the
Employer. Notwithstanding the foregoing, the Plan shall continue to be designed
to qualify as a profit sharing plan for purposes of Code Sections 401(a), 402,
412, and 417. Such Contributions will be equal to the Employer Contributions as
described below:
a) The amount of each Elective Deferral Contribution for a
Participant, including any Participant of Local 294, Local 1110
and Local United Electrical Workers 1139, shall be equal to any
percentage (not less than 1%) of his Compensation for the pay
period as elected in his elective deferral agreement. On and
after July 1, 1997, the amount of each Elective Deferral
Contribution for a Participant shall be equal to any percentage
made in half-percent increments (not less than 1% nor more than
15%) of his Compensation for the pay period as elected
in his elective deferral agreement. An Employee who is eligible
to participate in the Plan may file an elective deferral
agreement with the Employer. The elective deferral agreement to
start Elective Deferral Contributions may be effective on a
Participant's Entry Date (Reentry Date, if applicable) or any
following Semi-early Date. The Participant shall make any change
or terminate the elective deferral agreement by filing a new
elective deferral agreement. A Participant's elective deferral
agreement making a change may be effective on any date an
elective deferral agreement to start Elective Deferral
Contributions could be effective. A Participant's elective
deferral agreement to stop Elective Deferral Contributions may be
effective on any date. The elective deferral agreement must be in
writing and completed before the beginning of the pay period in
which Elective Deferral Contributions are to start, change or
stop.
Elective Deferral Contributions are fully (100%) vested and
nonforfeitable.
b) The amount of each Matching Contribution for a Participant shall
be equal to a percentage as determined by the Employer, of the
Elective Deferral Contributions made for him for the pay period.
On and after July 1, 1996, Matching Contributions shall be made
only for those Participants of Local No. 1139.
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On and after February 8, 1997, Matching Contributions are no
longer made under this Plan.
Matching Contributions for all nonunion Participants are fully
(100%) vested and nonforfeitable. Matching Contributions for
Participants of Local 1139 are subject to the Vesting Percentage.
c) The amount of each Additional Contribution for a Participant
shall be equal to 4% of his Compensation for the pay period. An
Additional Contribution shall be made for a Participant who is
represented for collective bargaining purposes by United
Electrical. Radio and Machine Workers Of America (UE) Local No.
1139, and only if he is an Active Participant on the last day of
such period. No Additional Contributions shall be made before
January 1, 1991.
On and after February 8, 1997, Additional Contributions are no
longer made under this Plan.
Additional Contributions are subject to the Vesting Percentage.
d) On the first day of the month after completing two Years of
Service, the amount of each Points-Based Additional Contribution
for a Participant shall be equal to the percentage of
Compensation as shown in the schedule below. Points-Based
Additional Contributions shall be made at the end of each month
based on the points determined for the Participant at the
beginning of the current Plan Year.
Age and Service Points Point-Based Percentage
Under 30 points 2.0%
30 to 39 points 2.5%
40 to 49 points 3.0%
50 to 54 points 4.0%
55 or more points 5.0%
The number of points for each such eligible person on any date of
allocation shall be equal to the sum of the amounts determined in
(a) and (b) below:
(a) One point for each year of the Participant's age (as of the
first day of the current Plan Year).
(b) One point for each full year of Accrual Service (as of the
first day of the current Plan Year).
Points-Based Additional Contributions shall exclude the
following:
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Participants represented for collective bargaining purposes by
United Electrical, Radio and Machine Workers of America (UK)
Local No. 1139.
Participants employed by Westair Cryogenics Co.
Participants who elect in writing to continue participation in
the Praxair, Inc. Pension Plan.
Points-Based Additional Contributions are fully (100%) vested and
nonforfeitable.
e) The amount of each Discretionary Contribution shall be
determined by the Employer.
Discretionary Contributions on and after January 1, 1991,
shall be made only for a Participant who is NOT represented
for collective bargaining purposes by United Electrical,
Radio and Machine Workers of America (UE), Local No. 1139,
who is not participating in the Praxair, Inc. Pension Plan,
and who had 1,000 or more Hours-of-Service in the Accrual
Computation Period that ends in the Plan Year, and who is an
Active Participant on the last day of the Plan Year.
Discretionary Contributions shall no longer be made on or
after July 1, 1997. Discretionary Contributions are fully
(100%) vested and nonforfeitable.
No Participant shall be permitted to have Elective Deferral
Contributions. as defined in the EXCESS AMOUNTS SECTION of Article III, made
under this Plan, or any other qualified plan maintained by the Employer. during
any taxable year, in excess of the dollar limitation contained in Code Section
402(g) in effect at the beginning of such taxable year.
If current or accumulated net income, earnings or profits before
January 1, 1992, are not sufficient to provide the following Contributions, such
Contributions shall be proportionately reduced:
Matching Contributions
Additional Contributions
In no event shall Employer Contributions exceed the maximum amount
which the Employer may deduct for a Plan Year for purposes of Federal income
tax, including amounts which may be carried over for deduction in future Plan
Years.
The Employer shall pay to the Trustee its Contributions used to
determine the Actual Deferral percentage as defined in the EXCESS AMOUNTS
SECTION of Article III to the Plan for each Plan Year not later than the end of
the twelve-month period immediately following the Plan Year for which they are
deemed to be paid. Any such Contributions accumulated through payroll deductions
shall be paid within 30 days of the date withheld or the date it is first
reasonably practical for the Employer to do so if earlier.
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A portion of the Plan assets resulting from Employer Contributions (but
not more than the original amount of those Contributions) may be returned if the
Employer Contributions are made because of a mistake of fact or are more than
the amount deductible under Code Section 404 (excluding any amount which is not
deductible because the Plan is disqualified). The amount involved must be
resumed to the Employer within one year after the date the Employer
Contributions are made by mistake of fact or the date the deduction is
disallowed whichever applies. Except as provided under this paragraph and
Articles VII and IX the assets of the Plan shall never be used for the benefit
of the Employer and are held for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and for defraying reasonable expenses of
administering the Plan.
SECTION 3.01A--VOLUNTARY CONTRIBUTIONS BY PARTICIPANTS.
At any time before his Retirement Date an Active Participant including
any Participant of Local 1139 may make Voluntary Contributions which may not be
deducted from his gross income for Federal income tax purposes. Voluntary
Contributions shall be made according to nondiscriminatory procedures and
limitations set up by the Plan Administrator.
A Participant's participation in the Plan is not affected by stopping
or changing Voluntary Contributions. An Active participant's request to start,
change or stop his Voluntary Contributions must be in writing on a form
furnished for that purpose. The form must be delivered to the Plan Administrator
before the date the Participant is to start, change or stop his Voluntary
Contributions.
Voluntary Contributions shall be forwarded to the Trustee not more than
three months after they are made and shall be credited to the Participant's
Account.
The part of the Participant's Account resulting from Voluntary
Contributions is fully (100%) vested and nonforfeitable at all times.
SECTION 3.01B-ROLLOVER CONTRIBUTIONS.
A Rollover Contribution may be made by or for an Eligible Employee if
the following conditions are met:
a) The Contribution is a rollover contribution which the Code
permits to be transferred to a plan that meets the requirements
of Code Section 401(a).
b) If the Contribution is made by the Eligible Employee, it is made
within sixty days after he receives the distribution.
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c) The Eligible Employee furnishes evidence satisfactory to the Plan
Administrator that the proposed transfer is in fact a rollover
contribution that meets conditions (a) and (b) above.
The Rollover Contribution may be made by the Eligible Employee or the
Eligible Employee may direct the trustee or named fiduciary of another plan to
transfer the funds which would otherwise be a Rollover Contribution directly to
this Plan. Such transferred funds shall be called a Rollover Contribution. The
Contribution shall be made according to procedures set up by the Plan
Administrator.
If the Eligible Employee is not an Active Participant at the time the
Rollover Contribution is made, he shall be deemed to be a Participant only for
the purposes of investment and distribution of the Rollover Contribution. He
shall not share in the allocation of Employer Contributions or Forfeitures and
he may not make nondeductible Participant Contributions until the time he meets
all the requirements to become an Active Participant.
Rollover Contributions made by or for an Eligible Employee shall be
credited to his Account. The part of the Participant's Account resulting from
Rollover Contributions is fully (100%) vested and nonforfeitable at all times. A
separate accounting record shall be maintained for that part of his Rollover
Contribution which consists of voluntary contributions that were deducted from
the Participant's gross income for Federal income tax purposes.
SECTION 3.01C-DEDUCTIBLE CONTRIBUTIONS BY PARTICIPANTS.
Prior to January 1, 1987, Active Participants of some predecessor plans
were allowed to make Employee Deductible Contributions which were deducted from
his gross income for Federal income tax purposes. The part of the Participant's
Account resulting from deductible contributions is fully (100%) vested and
nonforfeitable at all times. A separate accounting record shall be maintained
for that part of his Employee Deductible Contributions that were deducted from
the Participant's gross income for Federal income tax purposes.
SECTION 3.02--FORFEITURES.
The Nonvested Account of a Participant shall be forfeited as of the earlier of
the following: the date of the Participant's death, if prior to such date he had
ceased to be an Employee; or his Forfeiture Date. All or a part of a
Participant's Nonvested Account will be forfeited if, after he ceases to be an
Employee, he receives a distribution of his entire Vested Account or a
distribution of his Vested Account derived from Employer Contributions which
were not 100% vested when made according to the provisions of the VESTED
BENEFITS SECTION of Article V or the SMALL AMOUNTS SECTION of Article IX. If a
Participant's Vested Account is zero on the date he ceases to be an Employee, he
shall be deemed to have received a distribution of his entire Vested Account on
such date. The forfeiture will occur as of the date he receives the distribution
or on the date such provision became effective if later. If he receives a
distribution of his entire Vested Account his entire Nonvested Account will be
forfeited. If he receives a distribution of his Vested Account from Employer
Contributions which were not 100% vested
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<PAGE>
when made but less than his entire Vested Account the amount to be forfeited
will be determined by multiplying his Nonvested Account by a fraction. The
numerator of the fraction is the amount of the distribution derived from
Employer Contributions which were not 100% vested when made and the denominator
of the fraction is his entire Vested Account derived from such Employer
Contributions on the date of distribution.
A Forfeiture shall also occur as described in the EXCESS AMOUNTS
SECTION of Article III.
Forfeitures may first be applied to pay administrative expenses under
the Plan which would otherwise be paid by the Employer.
Forfeitures not used to pay administrative expenses shall be allocated
as described in the ALLOCATION SECTION of Article III as of the last day of the
Plan Year in which they arise. Upon such allocation Forfeitures shall be deemed
to be Discretionary Contributions except on and after January 1 1991 for a
Participant who is represented for collective bargaining purposes by United
Electrical Radio and Machine Workers of America (UE) Local No. 1139 in which
case Forfeitures shall be deemed to be Additional Contributions.
Forfeitures of Matching Contributions which relate to excess amounts
shall be applied as provided in the EXCESS AMOUNTS SECTION of Article III.
If a Participant again becomes an Eligible Employee after receiving a
distribution which caused his Nonvested Account to be forfeited he shall have
the right to repay to the Plan the entire amount of the distribution he received
(excluding any amount of such distribution resulting from Contributions which
were 100% vested when made). The repayment must be made before the earlier of
the date five years after the date he again becomes an Eligible Employee or the
end of the first period of five consecutive Vesting Breaks in Service which
begin after the date of the distribution.
If the Participant makes the repayment provided above the Plan
Administrator shall restore to his Account an amount equal to his Nonvested
Account which was forfeited on the date of distribution unadjusted for any
investment gains or losses. If the amount of the repayment is zero dollars
because the Participant was deemed to have received a distribution or the plan
did not have repayment provisions in effect on the date the distribution was
made and he again performs an Hour-of-Service as an Eligible Employee within the
repayment period the Plan Administrator shall restore the Participant's Account
as if he had made a required repayment on the date he performed such
Hour-of-Service. Restoration of the Participant's Account shall include
restoration of all Code Section 411(d)(6) protected benefits with respect to
that restored Account according to applicable Treasury regulations. Provided
however the Plan Administrator shall not restore the Nonvested Account if a
Forfeiture Date has occurred after the date of the distribution and on or before
the date of repayment and that Forfeiture Date would result in a complete
forfeiture of the amount the Plan Administrator would otherwise restore.
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<PAGE>
The Plan Administrator shall restore the Participant's Account by the
close of the Plan Year following the Plan Year in which repayment is made.
Permissible sources for restoration are Forfeitures or Employer Contributions.
The Employer shall contribute without regard to any requirement or condition of
the EMPLOYER CONTRIBUTIONS SECTION of Article III such additional amount needed
to make the required restoration. The repaid and restored amounts are not
included in the Participant's Annual Addition as defined in the CONTRIBUTION
LIMITATION SECTION of Article III.
SECTION 3.03--ALLOCATION.
Any Forfeitures released for allocation on and after January 1, 1991,
for the Plan Year shall be allocated among all eligible persons. The eligible
persons are all Participants who had 1,000 or more Hours-of-Service in the
Accrual Computation Period that ends in the Plan Year and who are Active
Participants on the last day of the Plan Year. The amount allocated to such a
person shall be determined below and under Article X
The following Contributions for Plan Years beginning on and after
January 1, 1991, shall be allocated among all eligible persons:
Discretionary Contributions
The eligible persons are all Participants who are NOT represented for
collective bargaining purposes by United Electrical, Radio and Machine Workers
of America (UE), Local No. 1139 who are not participating in the Praxair, Inc.
Pension Plan, and who had 1,000 or more Hours-of-Service in the Accrual
Computation Period that ends in the Plan Year and who are Active Participants on
the last day of the Plan Year. The amount allocated to such a person shall be
determined below and under Article X.
The following Contributions before January 1,1991 for the Plan Year,
plus any Forfeitures before January 1, 1991 released for allocation for the Plan
Year, shall be allocated among all eligible persons:
Discretionary Contributions
The eligible persons are all Participants who had 1,000 or more
Hours-of-Service in the Accrual Computation Period that ends in the Plan Year
and who are Active Participants on the last day of the Plan Year. The amount
allocated to such a person shall be determined below and under Article X.
The following Contributions for each Plan Year shall be allocated to
each Participant for whom such Contributions were made under the EMPLOYER
CONTRIBUTIONS SECTION of Article III:
Elective Deferral Contributions
Matching Contributions
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Additional Contributions
Points-Based Additional Contribution
These Contributions shall be allocated when made and credited to the
Participant's Account.
Discretionary Contributions plus any Forfeitures are allocated as of
the last day of each Plan Year. The amount allocated to each eligible person for
the Plan Year shall be equal to the Discretionary Contributions plus any
Forfeitures for the Plan Year, multiplied on and after January 1, 1994, by the
ratio of (a) his Annual Compensation as of the last day of the Plan Year to (b)
the total of such compensation for all eligible persons. This amount is
credited to his Account.
In determining the amount of Employer Contributions to be allocated to
a Participant who is a Leased Employee, contributions and benefits provided by
the leasing organization which are attributable to services such Leased Employee
performs for the Employer shall be treated as provided by the Employer and there
shall be no duplication of those contributions or benefits under this Plan.
SECTION 3.04--CONTRIBUTION LIMITATION.
a) For the purpose of determining the contribution limitation set
forth in this section, the following terms are defined:
AGGREGATE ANNUAL ADDITION means, for a Participant with respect
to any Limitation Year, the sum of his Annual Additions under all
defined contribution plans of the Employer, as defined in this
section, for such Limitation Year. The nondeductible participant
contributions which the Participant makes to a defined benefit
plan shall be treated as Annual Additions to a defined
contribution plan. The Contributions the Employer, as defined in
this section, made for the Participant for a Plan Year beginning
on or after March 31, 1984, to an individual medical benefit
account, as defined in Code Section 415(I)(2), under a pension or
annuity plan of the Employer, as defined in this section, shall
be treated as Annual Additions to a defined contribution plan.
Also, amounts derived from contributions paid or accrued after
December 31, 1985, in Fiscal 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 Code
Section 419A(d)(3), under a welfare benefit fund, as defined in
Code Section 419(e), maintained by the Employer, as defined in
this section, are treated as Annual Additions to a defined
contribution plan. The 25% of Compensation limit under Maximum
Permissible Amount does not apply to Annual Additions resulting
from contributions made to an individual medical account, as
defined in Code Section 415(1)(2), or to Annual Additions
resulting from contributions for medical benefits, within the
meaning of Code Section 419A, after separation from service.
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Annual Addition means the amount added to a Participant's account
for any Limitation Year which may not exceed the Maximum
Permissible Amount. The Annual Addition under any plan for a
Participant with respect to any Limitation Year, shall be equal
to the sum of (1) and (2) below:
1. Employer contributions and forfeitures credited to his
account for the Limitation Year.
2. Participant contributions made by him for the Limitation
Year.
Before the first Limitation Year beginning after December 31,
1986, the amount under (2) above is the lesser of (i) 1/2 of his
nondeductible participant contributions made for the Limitation
Year, or (ii) the amount, if any, of his nondeductible
participant contributions made for the Limitation Year which is
in excess of six percent of his Compensation, as defined in this
section, for such Termination Year.
COMPENSATION means all wages for Federal income tax withholding
purposes, as defined under Code Section 3401(a) (for purposes of
income tax withholding at the source), disregarding any rules
limiting the remuneration included as wages based on the nature
or location of the employment or the services performed.
Compensation also includes all other payments to an Employee in
the course of the Employer's trade or business, for which the
Employer must furnish the Employee a written statement under Code
Sections 6041(d) and 6051(a)(3). The amount reported in the
"Wages, Tips and Other Compensation" box on Form W-2 satisfies
this definition.
For any self-employed individual Compensation will mean earned
income.
For purposes of applying the limitations of this section,
Compensation for a Limitation Year is the Compensation actually
paid or made available during such Limitation Year.
Defined Benefit Plan Fraction means, with respect to a Limitation
Year for a Participant who is or has been a participant in a
defined benefit plan ever maintained by the Employer, as defined
in this section, the quotient, expressed as a decimal, of
1. the Participant's Projected Annual Benefit under all such
plans as of the close of such Limitation Year, divided by
2. on and after the TEFRA Compliance Date, the lesser of (i) or
(ii) below:
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i. 1.25 multiplied by the maximum dollar limitation which
applies to defined benefit plans determined for the
Limitation Year under Code Sections 415(b) or (d) or
ii. 1.4 multiplied by the Participant's highest average
compensation as defined in the defined benefit plan(s),
including any adjustments under Code Section 415(b).
Before the TEFRA Compliance Date, this denominator is the
Participant's Projected Annual Benefit as of the close of
the Limitation Year if the plan(s) provided the maximum
benefit allowable.
The Defined Benefit Plan Fraction shall be modified as follows:
If the Participant was a participant as of the first day of the
first Limitation Year beginning after December 3l, 1986, in one
or more defined benefit plans maintained by the Employer, as
defined in this section, which were in existence on May 6, 1986,
the denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such plans which
the Participant had accrued as of the close of the last
Limitation Year beginning before January 1, 1987, disregarding
any changes in the terms and conditions of the plan after May 5,
1986. The preceding sentence applies only if the defined benefit
plans individually and in the aggregate satisfied the
requirements of Code Section 415 for all Limitation Years
beginning before January 1. 1987.
DEFINED CONTRIBUTION PLAN FRACTION means for a Participant with
respect to a Limitation Year the quotient expressed as a decimal,
of
1. the Participants Aggregate Annual Additions for such
Limitation Year and all prior Limitation Years under all
defined contribution plans (including the Aggregate Annual
Additions attributable to nondeductible accounts under
defined benefit plans and attributable to all welfare
benefit funds as defined in Code Section 419(e) and
attributable to individual medical accounts as defined in
Code Section 415 (I) (2)) ever maintained by the Employer as
defined in this section divided by
2. on and after the TEFRA Compliance Date the sum of the amount
determined for the Limitation Year under (i) or (ii) below
whichever is less and the amounts determined in the same
manner for all prior Limitation Years during which he has
been an Employee or an employee of a predecessor employer:
i. 1.25 multiplied by the maximum permissible dollar
amount for each such Limitation Year, or
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ii. 1.4 multiplied by the maximum permissible percentage of
the Participant's Compensation as defined in this
section, for each such Limitation Year.
Before the TEFRA Compliance Date this denominator is the sum
of the maximum allowable amount of Annual Addition to his
account(s) under all the plan(s) of the Employer as defined
in this section, for each such Limitation Year.
The Defined Contribution Plan Fraction shall be modified as
follows:
If the Participant was a participant as of the first day of the
first Limitation Year beginning after December 31, 1986 in one or
more defined contribution plans maintained by the Employer as
defined in this section which were in existence on May 6, 1986
the numerator of this fraction shall be adjusted if the sum of
the Defined Contribution Plan Fraction and Defined Benefit Plan
Fraction would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment the dollar amount determined below shall be
permanently subtracted from the numerator of this fraction. The
dollar amount is equal to the excess of the sum of the two
fractions before adjustment over 1.0 multiplied by the
denominator of his Defined Contribution Plan Fraction. The
adjustment is calculated using his Defined Contribution Plan
Fraction and Defined Benefit Plan Fraction as they would be
computed as of the end of the last Limitation Year beginning
before January 1, 1987 and disregarding any changes in the terms
and conditions of the plan made after May 5, 1986 but using the
Code Section 415 limitations applicable to the first Limitation
Year beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before
January 1, 1987 shall not be recomputed to treat all employee
contributions as Annual Additions.
For a plan that was in existence on July 1, 1982 for purposes of
determining the Defined Contribution Plan Fraction for any
Limitation Year ending after December 31, 1982 the Plan
Administrator may elect in accordance with the provisions of Code
Section 415 that the denominator for each Participant for all
Limitation Years ending before January 1, 1983 will be equal to
1. the Defined Contribution Plan Fraction denominator which
would apply for the last Limitation Year ending in 1982 if
an election under this paragraph were not made multiplied by
2. a fraction equal to (i) over (ii) below:
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i. the lesser of (A) $51,875 or (B) 1.4 multiplied by 25%
of the Participant's Compensation as defined in this
section for the Limitation Year ending in 1981;
ii. the lesser of (A) $41 500 or (B) 25% of the
Participant's Compensation as defined in this section
for the Limitation Year ending in 1981.
The election described above is applicable only if the plan
administrators under all defined contribution plans of the
Employer, as defined in this section, also elect to use the
modified fraction.
EMPLOYER means any employer that adopts this Plan and all
Controlled Group members and any other entity required to be
aggregated with the employer pursuant to regulations under Code
Section 414(o).
LIMITATION YEAR means the 12-consecutive month period within
which it is determined whether or not the limitations of Code
Section 415 are exceeded. Limitation Year means each
12-consecutive month period ending on the last day of each Plan
Year including corresponding 12-consecutive month periods before
March 1, 1989 (before January 1, 1994 the last day of the Fiscal
Year (if the Fiscal Year is a 52-53 week period then the
Limitation Year shall be such period)). If the Limitation Year is
other than the calendar year execution of this Plan (or any
amendment to this Plan changing the Limitation Year) constitutes
the Employer's adoption of a written resolution electing the
Limitation Year. If the Limitation Year is changed the new
Limitation Year shall begin within the current Limitation Year
creating a short Limitation Year
MAXIMUM PERMISSIBLE AMOUNT means for a Participant with respect
to any Limitation Year the lesser of (1) or (2) below:
1. The greater of $30,000 or one-fourth of the maximum dollar
limitation which applies to defined benefit plans set forth
in Code Section 415(b)(1) as in effect for the Limitation
Year. (Before the TEFRA Compliance Date $25,000 multiplied
by the cost of living adjustment factor permitted by Federal
regulations.)
2. 25% of his Compensation, as defined in this section, for
such Limitation Year.
The compensation limitation referred to in (2) shall not apply to
any contribution for medical benefits (within the meaning of Code
Section 401(h) or Code Section 419A(f)(2)) which is otherwise
treated as an annual addition under Code Section 415(1)(1 ) or
Code Section 41 9A(d)(2).
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If there is a short Limitation Year because of a change in
Limitation Year. the Maximum Permissible Amount will not exceed
the maximum dollar limitation which would otherwise apply
multiplied by the following fraction:
Number of months in the short Limitation Year
12
PROJECTED ANNUAL BENEFIT means a Participant's expected annual
benefit under all defined benefit plan(s) ever maintained by the
Employer as defined in this section. The Projected Annual Benefit
shall be determined assuming that the Participant will continue
employment until the later of current age or normal retirement
age under such plan(s) and that the Participant's compensation
for the current Limitation Year and all other relevant factors
used to determine benefits under such plan(s) will remain
constant for all future Limitation Years. Such expected annual
benefit shall be adjusted to the actuarial equivalent of a
straight life annuity if expressed in a form other than a
straight life or qualified joint and survivor annuity.
b) The Annual Addition under this Plan for a Participant during a
Limitation Year shall not be more than the Maximum Permissible
Amount.
c) Contributions and Forfeitures which would otherwise be credited
to the Participant's Account shall be limited or reallocated to
the extent necessary to meet the restrictions of subparagraph (b)
above for any Limitation Year in the following order.
Nondeductible Voluntary Contributions shall be limited.
Forfeitures shall be reallocated in the same manner as described
in the ALLOCATION SECTION of Article III to the remaining
Participants to whom the limitations do not apply for the
Limitation Year. Discretionary Contributions shall be reallocated
in the same manner as described in the ALLOCATION SECTION of
Article III to the remaining Participants to whom the limitations
do not apply for the Limitation Year. The Discretionary
Contributions shall be limited if there are no such remaining
Participants. Additional Contributions shall be limited. Matching
Contributions shall be limited to the extent necessary to limit
the Participant's Annual Addition under this Plan to his maximum
amount. If Matching Contributions are limited because of this
limit Elective Deferral Contributions shall be reduced in
proportion.
If due to (i) an error in estimating a Participant's Compensation
as defined in this section (ii) because Forfeitures cannot be
reallocated to remaining Participants due to the limits of this
section (iii) as a result of a reasonable error in determining
the amount of elective deferrals (within the meaning of Code
Section 402(9)(3)) that may be made with respect to any
individual under the limits of Code Section 415 or (iv) other
limited facts and circumstances a Participant's Annual Addition
is greater than the amount permitted in (b) above such excess
amount shall be
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applied as follows. Nondeductible Voluntary Contributions will be
returned to the Participant. Elective Deferral Contributions will
be returned to the Participant. On and after the first Yearly
Date in 1994 Matching Contributions based on Elective Deferral
Contributions which are returned shall be forfeited. If after the
return of nondeductible Voluntary Contributions and Elective
Deferral Contributions an excess amount still exists and the
Participant is an Active Participant as of the end of the
Limitation Year the excess amount shall be used to offset
Employer Contributions for him in the next Limitation Year. If
after the return of nondeductible Voluntary Contributions and
Elective Deferral Contributions an excess amount still exists and
the Participant is not an Active Participant as of the end of the
Limitation Year the excess amount will be held in a suspense
account which will be used to offset Employer Contributions for
all Participants in the next Limitation Year. No Employer
Contributions or Participant Contributions that would be included
in the next Limitation Year's Annual Addition may be made before
the total suspense account has been used.
d) A Participant's Aggregate Annual Addition for a Limitation Year
shall not exceed the Maximum Permissible Amount.
If, for the Limitation Year, the Participant has an Annual
Addition under more than one defined contribution plan or a
welfare benefit fund, as defined in Code Section 419(e), or an
individual medical account, as defined in Code Section 415(1)(2),
maintained by the Employer, as defined in this section; and such
plans and welfare benefit funds and individual medical accounts
do not otherwise limit the Aggregate Annual Addition to the
Maximum Permissible Amount, any reduction necessary shall be made
first to the profit sharing plans, then to all other such plans
and welfare benefit funds and individual medical accounts and, if
necessary, by reducing first those that were most recently
allocated. Welfare benefit funds and individual medical accounts
shall be deemed to be allocated first. However, elective deferral
contributions shall be the last contributions reduced before the
welfare benefit fund or individual medical account is reduced.
If some of the Employer's defined contribution plans were not in
existence on July 1, 1982, and some were in existence on that
date, the Maximum Permissible Amount which is based on a dollar
amount may differ for a Limitation Year. The Aggregate Annual
Addition for the Limitation Year in which the dollar limit
differs shall not exceed the lesser of (1) 25% of Compensation as
defined in this section, (2) $45,475, or (3) the greater of
$30,000 or the sum of the Annual Additions for such Limitation
Year under all the plan(s) to which the $45,475 amount applies.
e) If a Participant is or has been a participant in both defined
benefit and defined contribution plans (including a welfare
benefit fund or individual medical account) ever maintained by
the Employer, as defined in this section, the sum of the Defined
Benefit Plan Fraction and the Defined Contribution Plan Fraction
for
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any Limitation Year shall not exceed 1.0 (1.4 before the TEFRA
Compliance Date).
After all other limitations set out in the plans and funds have
been applied, the following limitations shall apply so that the
sum of the Participant's Defined Benefit Plan Fraction and
Defined Contribution Plan Fraction shall not exceed 1.0 (1.4
before the TEFRA Compliance Date). The Projected Annual Benefit
shall be limited first. If the Participant's annual benefit(s)
equal his Projected Annual Benefit, as limited, then Annual
Additions to the defined contribution plan(s) shall be limited to
the extent needed to reduce the sum to 1.0 (1.4). First, the
voluntary contributions the Participant may make for the
Limitation Year shall be limited. Next, in the case of a profit
sharing plan, any forfeitures allocated to the Participant shall
be reallocated to remaining participants to the extent necessary
to reduce the decimal to 1.0 (1.4). Last, to the extent
necessary, employer contributions for the Limitation Year shall
be reallocated or limited, and any required and optional employee
contributions to which such employer contributions were geared
shall be reduced in proportion.
If, for the Limitation Year, the Participant has an Annual
Addition under more than one defined contribution plan or welfare
benefit fund or individual medical account maintained by the
Employer, as defined in this section, any reduction above shall
be made first to the profit sharing plans, then to all other such
plans and welfare benefit plans and individual medical accounts
and, if necessary, by reducing first those that were most
recently allocated. However, elective deferral contributions
shall be the last contributions reduced before the welfare
benefit fund or individual medical account is reduced. The annual
addition to the welfare benefit fund and individual medical
account shall be limited last.
SECTION 3.05--EXCESS AMOUNTS.
a) For the purposes of this section the following terms are defined:
ACTUAL DEFERRAL PERCENTAGE means the ratio (expressed as a
percentage) of Elective Deferral Contributions under this Plan on
behalf of the Eligible Participant for the Plan Year to the
Eligible. Participant's Compensation for the Plan Year. In
modification of the foregoing Compensation shall be limited to
the Compensation received while an Active Participant. The
Elective Deferral Contributions used to determine the Actual
Deferral Percentage shall include Excess Elective Deferrals
(other than Excess Elective Deferrals of Nonhighly Compensated
Employees that arise solely from Elective Deferral Contributions
made under this Plan or any other plans of the Employer or a
Controlled Group Member) but shall exclude Elective Deferral
Contributions that are used in computing the Contribution
Percentage (provided the Average Actual Deferral Percentage test
is satisfied both with and without exclusion of these Elective
Deferral Contributions). Under such rules as the Secretary of the
Treasury shall prescribe in Code Section 401(k)(3)(D),
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the Employer may elect to include Qualified Nonelective
Contributions and Qualified Matching Contributions under this
Plan in computing the Actual Deferral Percentage. For an Eligible
Participant for whom such Contributions on his behalf for the
Plan Year are zero the percentage is zero.
AGGREGATE LIMIT means the greater of (1) or (2) below:
1. The Sum of
i. 125 percent of the greater of the Average Actual
Deferral Percentage of the Nonhighly Compensated
Employees for the Plan Year or the Average Contribution
Percentage of Nonhighly Compensated Employees under the
Plan subject to Code Section 401(m) for the Plan Year
beginning with or within the Plan Year of the cash or
deferred arrangement and
ii. the lesser of 200% or two plus the lesser of such
Average Actual Deferral Percentage or Average
Contribution Percentage.
2. The Sum of
i. 125 percent of the lesser of the Average Actual
Deferral Percentage of the Nonhighly Compensated
Employees for the Plan Year or the Average Contribution
Percentage of Nonhighly Compensated Employees under the
Plan subject to Code Section 401(m) for the Plan Year
beginning with or within the Plan Year of the cash or
deferred arrangement and
ii. the lesser of 200% or two plus the greater of such
Average Actual Deferral Percentage or Average
Contribution Percentage.
AVERAGE ACTUAL DEFERRAL PERCENTAGE means the average (expressed
as a percentage) of the Actual Deferral Percentages of the
Eligible Participants in a group.
AVERAGE CONTRIBUTION PERCENTAGE means the average (expressed as a
percentage) of the Contribution Percentages of the Eligible
Participants in a group.
CONTRIBUTION PERCENTAGE means the ratio (expressed as a
percentage) of the Eligible Participant's Contribution Percentage
Amounts to the Eligible Participant's Compensation for the Plan
Year. In modification of the foregoing, Compensation shall be
limited to the Compensation received while an Active Participant.
For an Eligible Participant for whom such Contribution Percentage
Amounts for the Plan Year are zero, the percentage is zero.
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CONTRIBUTION PERCENTAGE AMOUNTS means the sum of the Participant
Contributions and Matching Contributions (that are not Qualified
Matching Contributions) under this Plan on behalf of the Eligible
Participant for the Plan Year. Such Contribution Percentage
Amounts shall not include Matching Contributions that are
forfeited either to correct Excess Aggregate Contributions or
because the Contributions to which they relate are Excess
Elective Deferrals, Excess Contributions or Excess Aggregate
Contributions. Under such rules as the Secretary of the Treasury
shall prescribe in Code Section 401(k)(3)(D), the Employer may
elect to include Qualified Nonelective Contributions and
Qualified Matching Contributions under this Plan which were not
used in computing the Actual Deferral Percentage in computing the
Contribution Percentage. The Employer may also elect to use
Elective Deferral Contributions in computing the Contribution
Percentage so long as the Average Actual Deferral Percentage test
is met before the Elective Deferral Contributions are used in the
Average Contribution Percentage test and continues to be met
following the exclusion of those Elective Deferral Contributions
that are used to meet the Average Contribution Percentage test.
ELECTIVE DEFERRAL CONTRIBUTIONS means employer contributions made
on behalf of a participant pursuant to an election to defer under
any qualified cash or deferred arrangement as described in Code
Section 401(k), any simplified employee pension cash or deferred
arrangement as described in Code Section 402(h)(1)(B), any
eligible deferred compensation plan under Code Section 457, any
plan as described under Code Section 501 (c)(18), and any
employer contributions made on behalf of a participant for the
purchase of an annuity contract under Code Section 403(b)
pursuant to a salary reduction agreement. Elective Deferral
Contributions shall not include any deferrals properly
distributed as excess Annual Additions.
ELIGIBLE PARTICIPANT means, for purposes of determining the
Actual Deferral Percentage, any Employee who is otherwise
authorized under the terms of the Plan to have Elective Deferral
Contributions made on his behalf for the Plan Year. Eligible
Participant means, for purposes of determining the Average
Contribution Percentage, any Employee who is otherwise authorized
under the terms of the Plan to have Participant Contributions or
Matching Contributions made on his behalf for the Plan Year.
EXCESS AGGREGATE CONTRIBUTIONS means, with respect to any Plan
Year, the excess of:
1. The aggregate Contributions taken into account in computing
the numerator of the Contribution Percentage actually made
on behalf of Highly Compensated Employees for such Plan
Year, over
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2. The maximum amount of such Contributions permitted by the
Average Contribution Percentage test (determined by reducing
Contributions made on behalf of Highly Compensated Employees
in order of their Contribution Percentages beginning with
the highest of such percentages).
Such determination shall be made after first determining Excess
Elective Deferrals and then determining Excess Contributions.
EXCESS CONTRIBUTIONS means, with respect to any Plan Year, the
excess of:
1. The aggregate amount of Contributions actually taken into
account in computing the Actual Deferral Percentage of
Highly Compensated Employees for such Plan Year, over
2. The maximum amount of such Contributions permitted by the
Actual Deferral Percentage test (determined by reducing
Contributions made on behalf of Highly Compensated Employees
in order of the Actual Deferral Percentages, beginning with
the highest of such percentages).
A Participant's Excess Contributions for a Plan Year will be
reduced by the amount of Excess Elective Deferrals, if any,
previously distributed to the Participant for the taxable year
ending in that Plan Year.
EXCESS ELECTIVE DEFERRALS means those Elective Deferral
Contributions that are includable in a Participant's gross income
under Code Section 402(g) to the extent such Participant's
Elective Deferral Contributions for a taxable year exceed the
dollar limitation under such Code section. Excess Elective
Deferrals shall be treated as Annual Additions, as defined in the
CONTRIBUTION LIMITATION SECTION of Article III, under the Plan,
unless such amounts are distributed no later than the first April
15 following the close of the Participant's taxable year.
PARTICIPANT CONTRIBUTIONS means contributions made to any plan by
or on behalf of a participant that are included in the
participant's gross income in the year in which made and that are
maintained under a separate account to which earnings and losses
are allocated.
MATCHING CONTRIBUTIONS means employer contributions made to this
or any other defined contribution plan, or to a contract
described in Code Section 403(b), on behalf of a participant on
account of a Participant Contribution made by such participant,
or on account of a participant's Elective Deferral Contributions,
under a plan maintained by the employer.
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QUALIFIED MATCHING CONTRIBUTIONS means Matching Contributions
which are subject to the distribution and nonforfeitability
requirements under Code Section 401(k) when made.
QUALIFIED NONELECTIVE CONTRIBUTIONS means any employer
contributions (other than Matching Contributions) which an
employee may not elect to have paid to him in cash instead of
being contributed to the plan and which are subject to the
distribution and nonforfeitability requirements under Code
Section 401(k).
b) A Participant may assign to this Plan any Excess Elective
Deferrals made during a taxable year by notifying the Plan
Administrator in writing on or before the first following March 1
of the amount of the Excess Elective Deferrals to be assigned to
the Plan. A Participant is deemed to notify the Plan
Administrator of any Excess Elective Deferrals that arise by
taking into account only those Elective Deferral Contributions
made to this Plan and any other plans of the Employer or a
Controlled Group member and reducing such Excess Elective
Deferrals by the amount of Excess Contributions, if any,
previously distributed for the Plan Year beginning in that
taxable year. The Participant's claim for Excess Elective
Deferrals shall be accompanied by the Participant's written
statement that if such amounts are not distributed, such Excess
Elective Deferrals, when added to amounts deferred under other
plans or arrangements described in Code Sections 401(k), 408(k)
or 403(b), will exceed the limit imposed on the Participant by
Code Section 402(g) for the year in which the deferral occurred.
The Excess Elective Deferrals assigned to this Plan can not
exceed the Elective Deferral Contributions allocated under this
Plan for such taxable year.
Notwithstanding any other provisions of the Plan, Elective
Deferral Contributions in an amount equal to the Excess Elective
Deferrals assigned to this Plan, plus any income and minus any
loss allocable thereto, shall be distributed no later than April
15 to any Participant to whose Account Excess Elective Deferrals
were assigned for the preceding year and who claims Excess
Elective Deferrals for such taxable year.
The income or loss allocable to such Excess Elective Deferrals
shall be equal to the sum of:
1. the income or loss allocable to the Participant's Elective
Deferral Contributions for the taxable year in which the
excess occurred multiplied by a fraction and
2. the income or loss allocable to the Participant's Elective
Deferral Contributions for the gap period between the end of
such taxable year and the date of distribution multiplied by
a fraction.
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The numerator of the fractions is the Excess Elective Deferrals.
The denominator of the fraction in (1) above is the closing
balance without regard to any income or loss occurring during
such taxable year (as of the end of such taxable year) of the
Participant's Account resulting from Elective Deferral
Contributions. The denominator of the fraction in (2) above is
the closing balance without regard to any income or loss
occurring during such gap period (as of the end of such gap
period) of the Participant's Account resulting from Elective
Deferral Contributions. The amount determined in (2) above shall
not be included for taxable years beginning after December 31,
1991.
Any Matching Contributions which were based on the Elective
Deferral Contributions which are distributed as Excess Elective
Deferrals, plus any income and minus any loss allocable thereto,
shall be forfeited. These Forfeitures shall be used to offset the
earliest Employer Contribution due after the Forfeiture arises.
c) As of the end of each Plan Year after Excess Elective Deferrals
have been determined, one of the following tests must be met:
1. The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the
Plan Year is not more than the Average Actual Deferral
Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 1.25.
2. The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the
Plan Year is not more than the Average Actual Deferral
Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 2 and
the difference between the Average Actual Deferral
Percentages is not more than 2.
The Actual Deferral Percentage for any Eligible Participant who
is a Highly Compensated Employee for the Plan Year and who is
eligible to have Elective Deferral Contributions (and Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, if used in computing the Actual deferral Percentage)
allocated to his account under two or more plans or arrangements
described in Code Section 401(k) that are maintained by the
Employer or a Controlled Group member shall be determined as if
all such Elective Deferral Contributions (and, if applicable,
such Qualified Nonelective Contributions or Qualified Matching
Contributions, or both) were made under a single arrangement. If
a Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement. Notwithstanding
the foregoing, certain plans shall be treated as Separate if
mandatorily disaggregated under the regulations under Code
Section 401(k).
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In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b) only if aggregated with one
or more other plans, or if one or more other plans satisfy the
requirements of such Code sections only if aggregated with this
Plan, then this section shall be applied by determining the
Actual Deferral Percentage of employees as if all such plans were
a single plan. Plans may be aggregated in order to satisfy Code
Section 401(k) only if they have the same Plan Year.
For purposes of determining the Actual Deferral Percentage of an
Eligible Participant who is a five-percent owner or one of the
ten most highly-paid Highly Compensated Employees, the Elective
Deferral Contributions (and Qualified Nonelective Contributions
or Qualified Matching Contributions, or both, if used in
computing the Actual Deferral Percentage) and Compensation of
such Eligible Participant include the Elective Deferral
Contributions (and, if applicable, Qualified Nonelective
Contributions or Qualified Matching Contributions, or both) and
Compensation for the Plan Year of Family Members. Family
Members, with respect to such Highly Compensated Employees, shall
be disregarded as separate employees in determining the Actual
Deferral Percentage both for Participants who are Nonhighly
Compensated Employees and for Participants who are Highly
Compensated Employees.
For purposes of determining the Actual Deferral Percentage,
Elective Deferral Contributions, Qualified Nonelective
Contributions and Qualified Matching Contributions must be made
before the last day of the 12-month period immediately following
the Plan Year to which contributions relate.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Actual Deferral Percentage test and
the amount of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.
The determination and treatment of the Contributions used in
computing the Actual Deferral Percentage shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
If the Plan Administrator should determine during the Plan Year
that neither of the above tests is being met, the Plan
Administrator may adjust the amount of future Elective Deferral
Contributions of the Highly Compensated Employees.
Notwithstanding any other provisions of this Plan, Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of each
Plan Year to Participants to whose Accounts such Excess
Contributions were allocated for the preceding Plan Year. If such
excess amounts are distributed more than 2 1/2 months after the
last day of the Plan Year in which such excess amounts arose, a
ten (10) percent excise tax will be imposed on the
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employer maintaining the plan with respect to such amounts. Such
distributions shall be made to Highly Compensated Employees on
the basis of the respective portions of the Excess Contributions
attributable to each of such employees. Excess Contributions of
Participants who are subject to the family member aggregation
rules shall be allocated among the Family Members in proportion
to the Elective Deferral Contributions (and amounts treated as
Elective Deferral Contributions) of each Family Member that is
combined to determine the combined Actual Deferral Percentage.
Excess Contributions shall be treated as Annual Additions, as
defined in the CONTRIBUTION LIMITATION SECTION of Article III,
under the Plan.
The Excess Contributions shall be adjusted for income or loss.
The income or loss allocable to such Excess Contributions shall
be equal to the sum of
3. the income or loss allocable to the Participant's Elective
Deferral Contributions (and, if applicable, Qualified
Nonelective Contributions or Qualified Matching
Contributions, or both) for the Plan Year in which the
excess occurred multiplied by a fraction and
4. the income or loss allocable to the Participant's Elective
Deferral Contributions (and, if applicable, Qualified
Nonelective Contributions or Qualified Matching
Contributions, or both) for the gap period between the end
of such Plan Year and the date of distribution multiplied by
a fraction.
The numerator of the fractions is the Excess Contributions. The
denominator of the fraction in (3) above is the closing balance
without regard to any income or loss occurring during such Plan
Year (as of the end of such Plan Year) of the Participant's
Account resulting from Elective Deferral Contributions (and
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if used in computing the Actual Deferral
Percentage). The denominator of the fraction in (4) above is the
closing balance without regard to any income or loss occurring
during such gap period (as of the end of such gap period) of the
Participant's Account resulting from Elective Deferral
Contributions (and Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, if used in computing
the Actual Deferral Percentage). The amount determined in (4)
above shall not be included for Plan Years beginning after
December 31, 1991.
Excess Contributions shall be distributed from the Participant's
Account resulting from Elective Deferral Contributions. If such
Excess Contributions exceed the balance in the Participant's
Account resulting from Elective Deferral Contributions, the
balance shall be distributed from the Participant's Account
resulting from Qualified Matching Contributions (if applicable)
and Qualified Nonelective Contributions, respectively.
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For Plan Years beginning after December 31, 1992, any Matching
Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Contributions, plus
any income and minus any loss allocable thereto, shall be
forfeited. These Forfeitures shall be used to offset the earliest
Employer Contribution due after the Forfeiture arises.
d) As of the end of each Plan Year, one of the following tests must
be met:
1. The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the
Plan Year is not more than the Average Contribution
Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 1.25.
2. The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the
Plan Year is not more than the Average Contribution
Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 2 and
the difference between the Average Contribution Percentages
is not more than 2.
If one or more Highly Compensated Employees participate in both a
cash or deferred arrangement and a plan subject to the Average
Contribution Percentage test maintained by the Employer or a
Controlled Group member and the sum of the Average Actual
Deferral Percentage and Average Contribution Percentage of those
Highly Compensated Employees subject to either or both tests
exceeds the Aggregate Limit, then the Contribution Percentage of
those Highly Compensated Employees who also participate in a cash
or deferred arrangement will be reduced (beginning with such
Highly Compensated Employees whose Contribution Percentage is the
highest) so that the limit is not exceeded. The amount by which
each Highly Compensated Employee's Contribution Percentage is
reduced shall be treated as an Excess Aggregate Contribution. The
Average Actual Deferral Percentage and Average Contribution
Percentage of the Highly Compensated Employees are determined
after any corrections required to meet the Average Actual
Deferral Percentage and Average Contribution Percentage tests.
Multiple use does not occur if both the Average Actual Deferral
Percentage and Average Contribution Percentage of the Highly
Compensated Employees does not exceed 1.25 multiplied by the
avenge Actual deferral Percentage and Average Contribution
Percentage of the Nonhighly Compensated employees.
The Contribution Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible
to have Contribution Percentage Amounts allocated to his account
under two or more plans described in Code Section 401(a) or
arrangements described in Code Section 401(k) that are maintained
by the Employer or a Controlled Group
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member shall be determined as if the total of such Contribution
Percentage Amounts was made under each plan. If a Highly
Compensated Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash or deferred
arrangements ending with or within the same calendar year shall
be treated as a single arrangement. Notwithstanding the
foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under Code Section
401(m).
In the event that this Plan satisfies the requirements of Code
Sections 401(m), 401(a)(4), or 410(b) only if aggregated with one
or more other plans, or if one or more other plans satisfy the
requirements of such Code sections only if aggregated with this
Plan, then this section shall be applied by determining the
Contribution Percentages of Eligible Participants as if all such
plans were a single plan. Plans may be aggregated in order to
satisfy Code Section 401(m) only if they have the same Plan Year
For purposes of determining the Contribution Percentage of an
Eligible Participant who is a five-percent owner or one of the
ten most highly-paid Highly Compensated Employees, the
Contribution Percentage Amounts and Compensation of such
Participant shall include Contribution Percentage Amounts and
Compensation for the Plan Year of Family Members. Family Members,
with respect to Highly Compensated Employees, shall be
disregarded as separate employees in determining the Contribution
Percentage both for employees who are Nonhighly Compensated
Employees and for employees who are Highly Compensated Employees.
For purposes of determining the Contribution Percentage,
Participant Contributions are considered to have been made in the
Plan Year in which contributed to the Plan. Matching
Contributions and Qualified Nonelective Contributions will be
considered made for a Plan Year if made no later than the end of
the 12-month period beginning on the day after the close of the
Plan Year.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Contribution Percentage test and the
amount of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.
The determination and treatment of the Contribution Percentage of
any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
Notwithstanding any other provisions of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited, if not vested, or
distributed, if vested, no later than the last day of each Plan
Year to Participants to whose Accounts such Excess Aggregate
Contributions were allocated for the preceding Plan Year. Excess
Aggregate
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Contributions of Participants who are subject to the family
member aggregation rules shall be allocated among the Family
Members in proportion to the Employee and Matching Contributions
(or amounts treated as Matching Contributions) of each Family
Member that is combined to determine the combined Contribution
Percentage. If such Excess Aggregate Contributions are
distributed more than 2 1/2 months after the last day of the Plan
Year in which such excess amounts arose, a ten (10) percent
excise tax will be imposed on the employer maintaining the plan
with respect to those amounts. Excess Aggregate Contributions
shall be treated as Annual Additions, as defined in the
CONTRIBUTION LIMITATION SECTION of Article III, under the plan.
The Excess Aggregate Contributions shall be adjusted for income
or loss. The income or loss allocable to such Excess Aggregate
Contributions shall be equal to the sum of:
3. the income or loss allocable to the Participant's
Contribution Percentage Amounts for the Plan Year in which
the excess occurred multiplied by a fraction and
4. the income or loss allocable to the Participant's
Contribution Percentage Amounts for the gap period between
the end of such Plan Year and the date of distribution
multiplied by a fraction.
The numerator of the fractions is the Excess Aggregate
Contributions. The denominator of the function in (3) above is
the closing balance without regard to any income or loss
occurring during such Plan Year (as of the end of such Plan Year)
of the Participant's Account resulting from Contribution
Percentage Amounts. The denominator of the fraction in (4) above
is the closing balance without regard to any income or loss
occurring during such gap period (as of the end of such gap
period) of the Participant's Account resulting from Contribution
Percentage Amounts. The amount determined in (4) above shall not
be included for Plan Years beginning after December 31, 1991.
Excess Aggregate Contributions shall be distributed from the
Participant's Account resulting from Participant Contributions that are not
required as a condition of employment or participation or for obtaining
additional benefits from Employer Contributions. If such Excess Aggregate
Contributions exceed the balance in the Participant's Account resulting from
such Participant Contributions, the balance shall be forfeited, if not vested,
or distributed, if vested, on a pro-rata basis from the Participant's Account
resulting from Contribution Percentage Amounts. These Forfeitures shall be used
to offset the earliest Employer Contribution due after the Forfeiture arises.
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ARTICLE IV
INVESTMENT OF CONTRIBUTIONS SECTION
4.01--INVESTMENT OF CONTRIBUTIONS.
All Contributions are forwarded by the Employer to the Trustee to be
deposited in the Trust Fund.
Investment of Contributions is governed by the provisions of the Trust,
the Group Contract and any other funding arrangement in which the Trust Fund is
or may be invested. To the extent permitted by the Trust, Group Contract or
other funding arrangement, the parties named below shall direct the
Contributions to any of the accounts available under the Trust or Group Contract
and may request the transfer of assets resulting from those Contributions
between such accounts. A Participant may not direct the Trustee to invest the
Participant's Account in collectibles. Collectibles means any work of art, rug
or antique, metal or gem, stamp or coin, alcoholic beverage or other tangible
personal property specified by the Secretary of Treasury. To the extent that a
Participant does not direct the investment of his Account, such Account shall be
invested ratably in the accounts available under the Trust or Group Contract in
the same manner as the undirected Accounts of all other Participants. The Vested
Accounts of all Inactive Participants may be segregated and invested separately
from the Accounts of all other Participants.
The Trust Fund shall be valued at current fair market value as of the
last day of the last calendar month ending in the Plan Year and, at the
discretion of the Trustee, may be valued more frequently. The valuation shall
take into consideration investment earnings credited, expenses charged, payments
made and changes in the value of the assets held in the Trust Fund. The Account
of a Participant shall be credited with its share of the gains and losses of the
Trust Fund. That part of a Participant's Account invested in a funding
arrangement which establishes an account or accounts for such Participant
thereunder shall be credited with the gain or loss from such account or
accounts. That part of a Participant's Account which is invested in other
funding arrangements shall be credited with a proportionate share of the gain or
loss of such investments. The share shall be determined by multiplying the gain
or loss of the investment by the ratio of the part of the Participant's Account
invested in such funding arrangement to the total of the Trust Fund invested in
such funding arrangement.
At least annually, the Named Fiduciary shall review all pertinent
Employee information and Plan data in order to establish the funding policy of
the Plan and to determine appropriate methods of carrying out the Plan's
objectives. The Named Fiduciary shall inform the Trustee and any Investment
Manager of the Plan's short-term and long-term financial needs so the investment
policy can be coordinated with the Plan's financial requirements.
a) Employer Contributions other than Elective Deferral
Contributions: The Participant (before January 1, 1994, the
Participant with the consent of the
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Trustee) shall direct the investment of such Employer
Contributions and transfer of assets resulting from those
Contributions.
b) Elective Deferral Contributions: The Participant (before January
1, 1994, the Participant with the consent of the Trustee) shall
direct the investment of Elective Deferral Contributions and
transfer of assets resulting from those Contributions.
c) Participant Contributions: The Participant (before January 1,
1994, the Participant with the consent of the Trustee) shall
direct the investment of Participant Contributions and transfer
of assets resulting from those Contributions.
d) Rollover Contributions: The Participant (before January 1, 1994,
the Participant with the consent of the Trustee) shall direct the
investment of Rollover Contributions and transfer of assets
resulting from those Contributions.
However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and Plan assets which are not subject to
Participant direction.
SECTION 4.01A--INVESTMENT IN QUALIFYING EMPLOYER SECURITIES.
Participants in the Plan shall be entitled to invest all or any
portion of their Account in Qualifying Employer Securities at full market price,
effective September 1, 1997. Effective September 1, 1997, Elective Deferral
Contributions, Voluntary Contributions, and Points-Based Contributions made on
and after September 1, 1997, may be used to purchase Qualifying Employer
Securities at either full market price or at a 10% discount.
Once investment in Qualifying Employer Securities is made available to
Eligible Employees, then it shall continue to be available unless the Plan and
Trust is amended to disallow such available investment.
Participants shall be entitled to have all or any portion of their
Account invested in Qualifying Employer Securities. In the absence of such
election, such Eligible Employees shall be deemed to have elected to have their
Accounts invested wholly in the Investment Funds. Once an election is made, it
shall be considered to continue until a new election is made.
Sales of Qualifying Employer Securities including discounted
Qualifying Employer Securities are limited to a maximum of 12 sales per year.
Discounted Qualifying Employer Securities may only be sold once every
12 months, and no transfers out of discounted Qualifying Employer Securities are
permitted for 12 months after the first purchase of discounted Qualifying
Employer Securities. The foregoing limitations shall not apply if a Participant
terminates employment with the Employer, the sale is part of the Participant's
complete withdrawal from the Plan (in which case such stock will be the last to
be liquidated) or the sale is made in connection with a loan made to the
Participant by the Plan.
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The Plan Administrator may use as the value of the shares the price at
which such shares traded on the New York Stock Exchange, or an average of the
bid and asked prices for such shares on the New York Stock Exchange, provided
that such value is representative of the fair market value of such shares in the
opinion of the Plan Administrator. If the Qualifying Employer Securities do not
trade on the annual valuation date or if the market is very thin on such date,
then the Plan Administrator may use the average of trade prices for a period of
time ending on such date, provided that such value is representative of the fair
market value of such shares in the opinion of the Plan Administrator. The value
of a Participant's Qualifying Employer Securities Account may be expressed in
units.
For purposes of determining the annual valuation of the Plan and for
reporting to Participants and regulatory authorities, the assets of the Plan
shall be valued at least annually on the Valuation Date which corresponds to the
last day of the Plan Year. The fair market value of Qualifying Employer
Securities shall be determined on such a Valuation Date. The average of the bid
and asked prices of Qualifying Employer Securities as of the date of the
transaction shall apply for purposes of valuing distributions and other
transactions of the Plan to the extent such value is representative of the fair
market value of such shares in the opinion of the Plan Administrator.
All purchases of Qualifying Employer Securities shall be made at a
price, or prices, which, in the judgment of the Plan Administrator, do not
exceed the fair market value of such Qualifying Employer Securities.
In the event that the Trustee acquires shares of Qualifying Employer
Securities by purchase from a "disqualified person" as defined in Code Section
4975(e)(2), in exchange for cash or other assets of the Trust, the terms of such
purchase shall contain the provision that in the event that there is a final
determination by the Internal Revenue Service or court of competent jurisdiction
that the fair market value of such shares of Qualifying Employer Security as of
the date of purchase was less than the purchase price paid by the Trustee, then
the seller shall pay or transfer, as the case may be, to the Trustee an amount
of cash, shares of Qualifying Employer Security, or any combination thereof
equal in value to the difference between the purchase price and said fair market
value for all such shares. In the event that cash and/or shares of Qualifying
Employer Security are paid and/or transferred to the Trustee under this
provision, shares of Qualifying Employer Security shall be valued at their fair
market value as of the date of said purchase, and interest at a reasonable rate
from the date of purchase to the date of payment shall be paid by the seller on
the amount of cash paid.
The Plan Administrator may direct the Trustee to sell, resell or
otherwise dispose of Qualifying Employer Securities to any person, including
Praxair, Inc., provided that any such sales to any disqualified person,
including Praxair, Inc., will be made at not less than the fair market value and
no commission is charged. Any such sale shall be made in conformance with
Section 408(e) of ERISA.
In the event the Plan Administrator directs the Trustee to dispose of
any Qualifying Employer Securities held as Trust Assets under circumstances
which require registration and/or
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qualification of the securities under applicable Federal or state securities
laws, then either Praxair, Inc. or the Employer, at its own expense, will take
or cause to be taken any and all such action as may be necessary or appropriate
to effect such registration and/or qualification.
Charges and expenses incurred in connection with the purchase and sale
of Qualifying Employer Securities held in the Qualifying Employer Securities
Account shall be charged to such Qualifying Employer Securities Account.
SECTION 4.01B--LIMITATION ON INVESTMENT IN QUALIFYING EMPLOYER
SECURITIES BY SOME PARTICIPANTS
Participants who are directors, officers, 10% stockholders of Praxair,
Inc., and other persons subject to Section 16 of the Securities Exchange Act of
1934 (the "1934 Act") will be permitted to change the level of investment in the
Qualifying Employer Securities Account only once every six months. Additionally,
Participants who are directors, officers, 10% stockholders of Praxair, Inc., and
other persons subject to Section 16 of the 1934 Act who cease participation in
the Qualifying Employer Securities Account, or who reduce their participation in
such account to a nominal level, may not participate (e.g., direct that
investments be made on their behalf under the Qualifying Employer Securities
Account again for at least six months. Intra-plan transfers by such Participants
between the Qualifying Employer Securities Account and the other investment
accounts available under the Plan may only be made pursuant to an investment
election made during the period beginning on the third business day following
the date of release of annual or quarterly financial information by Praxair,
Inc. and ending on the twelfth business day following such date. Subject to
certain limited exceptions, Participants who are directors, officers 10%
stockholders of Praxair, Inc., and other persons subject to Section 16 of the
1934 Act making withdrawals of investments under the Qualifying Employer
Securities Account must cease further purchases/investment under the Qualifying
Employer Securities Account for six months.
With respect to Participants who are directors, officers, 10%
stockholders of Praxair, Inc., and other persons subject to the 1934 Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
provisions of the Plan or action by the Plan Administrator fails to so comply,
it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Plan Administrator.
SECTION 4.01C--DIVIDENDS, RIGHTS, WARRANTS AND SCRIP
Any dividends payable on the Qualifying Employer Securities shall be
reinvested in additional shares of Qualifying Employer Securities at a 5%
discount. The purchase price for such additional shares shall be the average of
the opening price and closing price of Praxair, Inc. stock on the New York Stock
Exchange--Composite Transactions on the date the dividends are paid, less five
percent (5%).
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If any rights, warrants or scrip are issued in Qualifying Employer
Securities, the Trustee shall automatically exercise the rights, warrants or
scrip for whole shares, and shall automatically offer the rights, warrants, or
scrip for fractional shares for sale on the open market and shall reinvest the
proceeds in additional shares of Qualifying Employer Securities.
SECTION 4.02-PURCHASE OF INSURANCE.
The purchase of life insurance is available under this Plan for the
purpose of providing incidental death benefits.
On and after July 1, 1997, the Plan will no longer allow the purchase
of life insurance. Policies that are held under the Plan before July 1, 1997,
will continue to be held by the Plan.
Prior to July 1, 1997, an Active Participant may elect to have any part
of his Account which results from Employer Contributions applied to purchase
life insurance coverage on his life.
The Trustee shall apply for and will be the owner of any Insurance
Policy purchased under the terms of this Plan. The purchase shall be subject to
the provisions of this section, the distribution of benefits provisions of
Article V1, and the beneficiary provisions of the BENEFICIARY SECTION of Article
IX. If the Participant has a spouse to whom he has been continuously married for
at least one year, such spouse shall be his Beneficiary under the Insurance
Policy on the Participant's life unless (a) a qualified election has been made
according to the provisions of the ELECTION PROCEDURES SECTION of Article V1 or
(b) the Trustee has been named as Beneficiary. If the Trustee is named as
Beneficiary, upon the death of the Participant, the Trustee shall be required to
pay over all proceeds of the Insurance Policy to the Participant's Beneficiary
or spouse, as the case may be, according to the distribution of benefits
provisions of Article Vl. Under no circumstances shall the Trust retain any part
of the proceeds. In the event of any conflict between the terms of this Plan and
the terms of any Insurance Policy purchased hereunder, the Plan shall control.
The purchase of insurance shall be subject to the limitations that may
be imposed by the Insurer under the applicable Insurance Policy. The Insurance
Policy may provide for waiver of premium for disability and for substandard
extra insurance coverage if the insured is not a standard risk.
The total of all insurance premiums provided by Employer Contributions
for a Participant shall be limited to a percentage of all Employer Contributions
made for him. All such ordinary life insurance premiums shall be limited to a
percentage which is less than 50%. All such term life and universal life
insurance premiums shall be limited to a percentage which is not more than 25%.
If both ordinary life insurance and term life or universal life insurance is
purchased, 1/2 of all such ordinary life insurance premiums and all such other
life insurance premiums shall be limited to a percentage which is not more than
25%. Ordinary life insurance policies are policies with both nondecreasing death
benefits and nonincreasing premiums.
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Any dividends declared under an Insurance Policy for a Participant may,
within the terms of the Insurance Policy, be applied to reduce the earliest
premium due, purchase paid-up insurance coverage, accumulate under the policy to
provide additional death benefit or be credited to the Participant's Account
which is included in the Investment Fund. In the absence of any direction, such
dividends shall be applied to reduce the earliest premium due for such amount of
insurance.
A Participant may elect to have amounts deducted from his Account to
pay insurance premiums. The total amount deducted cannot exceed the amount of
Contributions credited to his Account which were not used to purchase insurance,
but could have been.
If a decrease in the amount of life insurance is necessary any cash
values of the terminated insurance shall be retained in the Participant's
Account and added to the Investment Fund.
SECTION 4.03--TRANSFER OF OWNERSHIP.
Any transfer of ownership under this section shall be subject to the
distribution of benefits provisions of Article Vl.
Upon the request of a Participant the Employer may purchase for its
cash value a personal life insurance policy issued to and insuring the life of
the Participant. Such policy shall be immediately transferred from the Employer
to the Trustee. The cash value of the purchased policy shall be a part of the
Employer Contribution for the Plan Year. Any such purchase shall be accomplished
only under an appropriate written agreement between the Participant the Trustee
and the Employer. In lieu of the Employer's purchase of such policy and at the
Employer's direction the Trustee may purchase the policy directly from the
Participant. These provisions shall not be available if the policy is subject to
a policy loan or similar lien. The purchase of and future premiums for any such
policy shall be subject to the limitations in the PURCHASE OF INSURANCE SECTION
of Article IV.
If the Insurance Policy allows a Participant may pay the Trustee an
amount equal to the cash values of any Insurance Policy for him. Such payment
shall become a part of his Account. Upon receiving the payment the Trustee shall
transfer ownership of the policy to the Participant. This transfer of ownership
is not a distribution from the Plan. This option shall only be available to a
Participant if the policy would but for the sale be surrendered by the Plan.
If a distribution of a Participant's Vested Account would include the
cash values of an Insurance Policy for him the Participant may have ownership of
such policy transferred to himself without making payment to the Trustee if
permitted by such Insurance Policy. Any Insurance Policy transferred to the
Participant for which he has not made payment to the Trustee is a distribution
from the Plan.
In applying the provisions of this section all Participants in similar
circumstances shall be treated in a similar manner. Participants who are highly
compensated employees as defined in
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Code Section 414(q) (officers shareholders or highly compensated Employees
before the first Yearly Date after December 31, 1988) shall not be treated in a
manner more favorable than that afforded all other Participants.
SECTION 4.04--TERMINATION OF INSURANCE.
The termination of insurance under this section shall be subject to the
distribution of benefits provisions of Article VI.
No premium payments shall be made under this Plan for an Inactive
Participant. If a Participant becomes an Inactive Participant before Retirement
Date the Trustee may either use the cash values of the Insurance Policy for the
Participant to provide paid-up insurance or may surrender the Insurance Policy.
The cash values of a surrendered Insurance Policy are retained in the
Participant's Account and added to the Investment Fund. The purchase of paid-up
insurance shall be subject to the provisions of the Insurance Policy. If the
Participant ceases to be an Employee before Retirement Date the Participant may
elect to have ownership of the Insurance Policy transferred as provided in the
TRANSFER OF OWNERSHIP SECTION of Article IV.
On a Participant's Retirement Date all or a part of any Insurance
Policy for him the ownership of which has not been transferred to him shall
terminate. The cash values shall be paid to the Participant in cash or applied
to provide an income for him according to the provisions of the Insurance
Policy. In any event no portion of the value of any Insurance Policy shall be
used to continue life insurance protection under the Plan beyond actual
retirement.
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ARTICLE V
BENEFITS
SECTION 5.01--RETIREMENT BENEFITS.
On a Participants Retirement Date his Vested Account shall be
distributed to him according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX
SECTION 5.02--DEATH BENEFITS.
If a Participant dies before his Annuity Starting Date his Vested
Account shall be distributed according to the distribution of benefits
provisions of Article VI and the provisions of the SMALL AMOUNTS SECTION of
Article IX.
SECTION 5.03--VESTED BENEFITS.
A Participant may receive a distribution of his Vested Account at any
time after he ceases to be an Employee provided he has not again become an
Employee. If such amount is not payable under the provisions of the SMALL
AMOUNTS SECTION of Article IX it will be distributed only if the Participant so
elects. The Participant s election shall be subject to the requirements in the
ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit.
If a Participant does not receive an earlier distribution according to
the provisions of this section or the SMALL AMOUNTS SECTION of Article IX upon
his Retirement Date or death his Vested Account shall be applied according to
the provisions of the RETIREMENT BENEFITS SECTION or the DEATH BENEFITS SECTION
of Article V.
The Nonvested Account of a Participant who has ceased to be an Employee
shall remain a part of his Account until it becomes a Forfeiture; provided
however if the Participant again becomes an Employee so that his Vesting
Percentage can increase the Nonvested Account may become a part of his Vested
Account.
SECTION 5.04--WHEN BENEFITS START.
Benefits under the Plan begin when a Participant retires dies or ceases
to be an Employee whichever applies as provided in the preceding sections of
this article. Benefits which begin before Normal Retirement Date for a
Participant who became Totally and Permanently Disabled when he was an Employee
shall be deemed to begin because he is Totally and Permanently Disabled. The
start of benefits is subject to the qualified election procedures of Article VI.
Unless otherwise elected, benefits shall begin before the sixtieth day
following the close of the Plan Year in which the latest date below occurs:
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a) The date the Participant attains age 65 or (Normal Retirement
Age, if earlier).
b) The tenth anniversary of the Participant's Entry Date.
c) The date the Participant ceases to be an Employee.
Notwithstanding the foregoing, the failure of a Participant and spouse
to consent to a distribution while a benefit is immediately distributable,
within the meaning of the ELECTION PROCEDURES SECTION of Article Vl, shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this section.
The Participant may elect to have his benefits begin after the latest
date for beginning benefits described above, subject to the provisions of this
section. The Participant shall make the election in writing and deliver the
signed statement of election to the Plan Administrator before Normal Retirement
Date or the date he ceases to be an Employee, if later. The election must
describe the form of distribution and the date the benefits will begin.
The Participant shall not elect a date for beginning benefits or a form
of distribution that would result in a benefit payable when he dies which would
be more than incidental within the meaning of governmental regulations.
Benefits shall begin by the Participant's Required Beginning Date, as
defined in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS
SECTION of Article Vl.
Contributions which are used to compute the Actual Deferral Percentage,
as defined in the EXCESS AMOUNTS SECTION of Article III, may be distributed upon
disposition by the Employer of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) used by the Employer in a trade or business
or disposition by the Employer of the Employer's interest in a subsidiary
(within the meaning of Code Section 409(d)(3)) if the transferee corporation is
not a Controlled Group member, the Employee continues employment with the
transferee corporation and the transferor corporation continues to maintain the
Plan. Such distributions made after March 31, 1988, must be made in a single
sum.
SECTION 5.05--WITHDRAWAL PRIVILEGES.
A Participant may withdraw that part of his Vested Account resulting
from his Voluntary Contributions and Employee Deductible Contributions. A
Participant may make such a withdrawal at any time. The ESOP account balance
transferred from the CBI 401(k) Pay Deferral Plan shall be available for
withdrawal at any time.
A Participant may withdraw up to 75% of his Vested Account which
results from the following Contributions
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Elective Deferral Contributions
Matching Contributions
Points-Based Additional Contributions
Additional Contributions
Discretionary Contributions
Rollover Contributions
in the event of hardship due to an immediate and heavy financial need.
Withdrawals from the Participant's Account resulting from Elective Deferral
Contributions shall be limited to the amount of the Participant's Elective
Deferral Contributions. Immediate and heavy financial need shall be limited to
(i) expenses incurred or for medical care described in Code Section 213(d) of
the Participant the Participant's spouse or any dependents of the Participant
(as defined in Code Section 152); (ii) purchase (excluding mortgage payments) of
a principal residence for the Participant; (iii) payment of tuition and related
educational fees for the next 12 months of postsecondary education for the
Participant his spouse children or dependents; (iv) 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 (v) any other distribution
which is deemed by the Commissioner of Internal Revenue to be made on account of
immediate and heavy financial need as provided in Treasury regulations. The
Participant's request for a withdrawal shall include his written statement that
an immediate and heavy financial need exists and explain its nature.
No withdrawal shall be allowed which is in excess of the amount
required to relieve the financial need or if such need can be satisfied from
other resources that are reasonably available to the Participant. The amount of
an immediate and heavy financial need may include any amount necessary to pay
any Federal state or local income taxes or penalties reasonably anticipated to
result from the distribution. The Participant's request for a withdrawal shall
include his written statement that the amount requested does not exceed the
amount needed to meet the financial need. The Participant's request for a
withdrawal shall include his written statement that the need cannot be relieved:
(i) through reimbursement or compensation by insurance or otherwise; (ii) by
reasonable liquidation of the Participant's assets to the extent such
liquidation would not itself cause immediate and heavy financial need; (iii) by
cessation of elective contributions or employee contributions under the Plan; or
(iv) by other distributions or nontaxable (at the time of the loan) loans
currently available from plans maintained by the Employer or any other employer
or by borrowing from commercial sources on reasonable commercial terms.
Before the first Yearly Date in 1992 immediate and heavy financial need
in (i) shall be limited to medical expenses described in Code Section 213 (d)
incurred by the Participant (as defined in Code Section 152) and such need in
(iii) shall be limited to payment of tuition for the next semester or quarter of
post-secondary education for the Participant his spouse children or dependents.
In addition the amount of the immediate and heavy financial need shall not
include amounts necessary to pay any Federal state or local income taxes or
penalties reasonably anticipated to result from the distribution.
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A request for withdrawal shall be in writing on a form furnished for
that purpose and delivered to the Plan Administrator before the withdrawal is to
occur. The Participant's request shall be subject to the requirements in the
ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit payable in a form other than a Qualified Joint and Survivor
Form.
A forfeiture shall not occur solely as a result of a withdrawal.
SECTION 5.06--LOANS TO PARTICIPANTS.
Loans shall be made available to all Participants on a reasonably
equivalent basis. For purposes of this section Participant means any Participant
or Beneficiary who is a party-in-interest within the meaning of Section 3(14) of
the Employee Retirement Income Security Act of 1974. Loans shall not be made to
highly compensated employees as defined in Code Section 414(q) in an amount
greater than the amount made available to other Participants.
No loans will be made to any shareholder-employee or owner-employee.
For purposes of this requirement a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of Code Section 318(a)(1)) on any day
during the taxable year of such corporation more than 5% of the outstanding
stock of the corporation.
A loan to a Participant shall be a Participant-directed investment of
his Account. No Account other than the borrowing Participant's Account shall
share in the interest paid on the loan or bear any expense or loss because of
the loan.
The number of outstanding loans shall be limited to two. The minimum
amount of any loan shall be $1,000.
Loans must be adequately secured and bear a reasonable rate of
interest.
The amount of the loan shall not exceed the maximum amount that may be
treated as a loan under Code Section 72(D) (rather than a distribution) to the
Participant and shall be equal to the lesser of (a) or (b) below:
a) $50,000 reduced by the highest outstanding loan balance of loans
during the one-year period ending on the day before the new loan
is made.
b) The greater of (1) or (2) reduced by (3) below:
1. One-half of the Participant's Vested Account.
2. $ 10,000.
3. Any outstanding loan balance on the date the new loan is
made.
For purposes of this maximum a Participant's Vested Account does not include any
accumulated deductible employee contributions as defined in Code Section
72(o)(5)(B) and all qualified employer plans as defined in Code Section 72(p)(4)
of the Employer and any Controlled Group member shall be treated as one plan.
The foregoing notwithstanding the amount of such loan shall not exceed
50% of the amount of the Participant's Vested Account reduced by any outstanding
loan balance on the date the new loan is made. For purposes of this maximum a
Participant's Vested Account does not include any accumulated deductible
employee contributions as defined in Code Section 72(o)(5)(B). No collateral
other than a portion of the Participant's Vested Account (as limited above)
shall be accepted. The Loan Administrator shall determine if the collateral is
adequate for the amount of the loan requested.
A Participant must obtain the consent of the Participant's spouse if
any to the use of the Vested Account as security for the loan. Spousal consent
shall be obtained no earlier than the beginning of the 90-day period that ends
on the date on which the loan to be so secured is made. The consent must be in
writing must acknowledge the effect of the loan and must be witnessed by a plan
representative or a notary public. Such consent shall thereafter be binding with
respect to that loan. A new consent shall be required if the Vested Account is
used for collateral upon renegotiation extension renewal or other revision of
the loan.
If a valid spousal consent has been obtained in accordance with the
above then notwithstanding any other provision of this Plan the portion of the
Participant's Vested Account used as a security interest held by the Plan by
reason of a loan outstanding to the Participant shall be taken into account for
purposes of determining the amount of the Vested Account payable at the time of
death or distribution but only if the reduction is used as repayment of the
loan. If less than 100% of the Participant's Vested Account (determined without
regard to the preceding sentence) is payable to the surviving spouse then the
Vested Account shall be adjusted by first reducing the Vested Account by the
amount of the security used as repayment of the loan and then determining the
benefit payable to the surviving spouse.
Each loan shall bear a reasonable fixed rate of interest to be
determined by the Loan Administrator. In determining the interest rate the Loan
Administrator shall take into consideration fixed interest rates currently being
charged by commercial lenders for loans of comparable risk on similar terms and
for similar durations so that the interest will provide for a return
commensurate with rates currently charged by commercial lenders for loans made
under similar circumstances. The Loan Administrator shall not discriminate among
the Participants in the matter of interest rates in accordance with the current
appropriate standards.
The loan shall by its terms require that repayment (principal and
interest) be amortized in level payments not less frequently than quarterly over
a period not extending beyond five years from the date of the loan. The period
of repayment for any loan shall be arrived at by mutual agreement between the
Loan Administrator and the Participant.
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The Participant shall make a written application for a loan from the
Plan on forms provided by the Loan Administrator. The application must specify
the amount and duration requested. No loan will be approved unless the
Participant is creditworthy. The Participant must grant authority to the Loan
Administrator to investigate the Participant s creditworthiness so that the loan
application may be properly considered.
Information contained in the application for the loan concerning the
income liabilities and assets of the Participant will be evaluated to determine
whether there is a reasonable expectation that the Participant will be able to
satisfy payments on the loan as due. Additionally the Loan Administrator will
pursue any appropriate further investigations concerning the creditworthiness
and/or credit history of the Participant to determine whether a loan should be
approved.
Each loan shall be fully documented in the form of a promissory note
signed by the Participant for the face amount of the loan together with interest
determined as specified above.
There will be an assignment of collateral to the Plan executed at the
time the loan is made.
In those cases where repayment through payroll deduction by the
Employer is available installments are so Payable and a payroll deduction
agreement will be executed by the Participant at the time of making the loan.
Where payroll deduction is not available payments are to be timely
made.
Any payment that is not by payroll deduction shall be made payable to
the Employer or Trustee as specified in the promissory note and delivered to the
Loan Administrator including prepayments and penalties if any and other amounts
due under the note.
The promissory note may provide for reasonable late payment penalties
and/or service fees. Any penalties or service fees shall be applied to all
Participants in a nondiscriminatory manner. If the promissory note so provides
such amounts may be assessed and collected from the Account of the Participant
as part of the loan balance
Each loan may be paid prior to maturity in part or in full without
penalty or service fee except as may be set out in the promissory note.
If any amount remains unpaid for more than 31 days after due a default
is deemed to occur.
Upon default the Plan has the right to pursue any remedy available by
law to satisfy the amount due along with accrued interest including the right to
enforce its claim against the security pledged and execute upon the collateral
as allowed by law.
If any payment of principal or interest or penalty or any portion
thereof is not made for a period of 90 days after due the entire principal
balance whether or not otherwise then due shall
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become immediately due and payable without demand or notice and subject to
collection or satisfaction by any lawful means including specifically but not
limited to the right to enforce the claim against the security pledged and to
execute upon the collateral as allowed by law.
In the event of default foreclosure on the note and attachment of
security or use of amounts pledged to satisfy the amount then due will not occur
until a distributable event occurs in accordance with the Plan and will not
occur to an extent greater than the amount then available upon any distributable
event which has occurred under the Plan
All reasonable costs and expenses including but not limited to
attorney's fees incurred by the Plan in connection with any default or in any
proceeding to enforce any provision of a promissory note or instrument by which
a promissory note for a Participant loan is secured shall be assessed and
collected from the Account of the Participant as part of the loan balance.
If payroll deduction is being utilized in the event that a
Participant's available payroll deduction amounts in any given month are
insufficient to satisfy the total amount due there will be an increase in the
amount taken subsequently sufficient to make up the amount that is then due. If
the subsequent deduction is also insufficient to satisfy the amount due within
31 days a default is deemed to occur as above. If any amount remains past due
more than 90 days the entire principal amount whether or not otherwise then due
along with interest then accrued and any penalty amount then due shall become
due and Payable as above.
If the Participant ceases to be a party-in-interest (as defined in this
section) the balance of the outstanding loan becomes due and payable and the
Participant's Vested Account will be used as available for distribution(s) to
pay the outstanding loan. The Participant's Vested Account will not be used to
pay any amount due under the outstanding loan before the date which is 31 days
after the date he ceased to be an Employee and the Participant may elect to
repay the outstanding loan with interest on the day of repayment. If no
distributable event has occurred under the Plan at the time that the
Participant's Vested Account would otherwise be used under this provision to pay
any amount due under the outstanding loan this will not occur until the time or
in excess of the extent to which a distributable event occurs under the Plan.
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ARTICLE VI
DISTRIBUTION OF BENEFITS
SECTION 6.01--AUTOMATIC FORMS OF DISTRIBUTION.
Unless a qualified election of an optional form of benefit has been
made within the election period (see the ELECTION PROCEDURES SECTION of Article
Vl) the automatic form of benefit payable to or on behalf of a Participant is
determined as follows:
a) The automatic form of retirement benefit for a Participant who
does not die before his Annuity Starting Date shall be the
Qualified Joint and Survivor Form.
b) The automatic form of death benefit for a Participant who dies
before his Annuity Starting Date shall be:
1. A Qualified Preretirement Survivor Annuity for a Participant
who has a spouse to whom he has been continuously married
throughout the one-year period ending on the date of his
death. The spouse may elect to start receiving the death
benefit on any first day of the month on or after the
Participant dies and before the date the Participant would
have been age 70 1/2. If the spouse dies before benefits
start the Participant's Vested Account determined as of the
date of the spouse's death shall be paid to the spouse's
Beneficiary.
2. A single-sum payment to the Participant's Beneficiary for a
Participant who does not have a spouse who is entitled to a
Qualified Preretirement Survivor Annuity.
Before a death benefit will be paid on account of the death of a
Participant who does not have a spouse who is entitled to a
Qualified Preretirement Survivor Annuity it must be established
to the satisfaction of a plan representative that the Participant
does not have such a spouse.
SECTION 6.02--OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS.
a) For purposes of this section the following terms are defined:
APPLICABLE LIFE EXPECTANCY means Life Expectancy (or Joint and
Last Survivor Expectancy) calculated using the attained age of
the Participant (or Designated Beneficiary) as of the
Participant's (or Designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year
which has elapsed since the date Life Expectancy was first
calculated. If Life Expectancy is being recalculated the
Applicable Life Expectancy shall be the Life Expectancy so
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recalculated. The applicable calendar year shall be the first
Distribution Calendar Year and if Life Expectancy is being
recalculated such succeeding calendar Year.
DESIGNATED BENEFICIARY means the individual who is designated as
the beneficiary under the Plan in accordance with Code Section
401(a)(9) and the regulations thereunder.
DISTRIBUTION CALENDAR YEAR means a calendar year for which a
minimum distribution is required. For distributions beginning
before the Participant's death the first Distribution Calendar
Year is the calendar year immediately preceding the calendar year
which contains the Participant's Required Beginning Date. For
distributions beginning after the Participant's death the first
Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to (e) below.
JOINT AND LAST SURVIVOR EXPECTANCY means joint and last survivor
expectancy computed by use of the expected return multiples in
Table VI of section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse in the
case of distributions described in (e)(2)(ii) below) by the time
distributions are required to begin life expectancies shall be
recalculated annually. Such election shall be irrevocable as to
the Participant (or spouse) and shall apply to at subsequent
years. The life expectancy of a nonspouse Beneficiary may not be
recalculated.
LIFE EXPECTANCY means life expectancy computed by use of the
expected return multiples in Tables V of section 1.72-9 of the
Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse in the
case of distributions described in (e)(2)(ii) below) by the time
distributions are required to begin life expectancies shall be
recalculated annually. Such election shall be irrevocable as to
the Participant (or spouse) and shall apply to all subsequent
years. The life expectancy of a nonspouse Beneficiary may not be
recalculated.
PARTICIPANT'S BENEFIT means
1. The Account Balance as of the last valuation date in the
calendar year immediately preceding the Distribution
Calendar Year (valuation calendar year) increased by the
amount of any contributions or forfeitures allocated to the
Account balance as of the dates in the valuation calendar
year after the valuation date and decreased by distributions
made in the valuation calendar year after the valuation
date.
2. For purposes of (1) above if any portion of the minimum
distribution for the first Distribution Calendar Year is
made in the second Distribution
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Calendar Year on or before the Required Beginning Date the
amount of the minimum distribution made in the second
Distribution Calendar Year shall be treated as if it had
been made in the immediately preceding Distribution Calendar
Year.
REQUIRED BEGINNING DATE means for a Participant the first day of
April of the calendar year following the calendar year in which
the Participant attains age 70 1/2 unless otherwise provided in
(1), (2) or (3) below:
1. The Required Beginning Date for a Participant who attains
age 70 1/2 before January 1, 1988 and who is not a 5-percent
owner is the first day of April of the calendar year
following the calendar year in which the later of retirement
or attainment of age 70 1/2 occurs.
2. The Required Beginning Date for a Participant who attains
age 70 1/2 before January l, 1988 and who is a 5-percent
owner is the first day of April of the calendar year
following the later of
i. the calendar year in which the Participant attains age
70 1/2 or
ii. the earlier of the calendar year with or within which
ends the Plan Year in which the Participant becomes a
5-percent owner or the calendar year in which the
Participant retires
3. The Required Beginning Date of a Participant who is not a
5-percent owner and who attains age 70 1/2 during 1988 and
who has not retired as of January 1 1989 is April 1 1990.
A Participant is treated as a 5-percent owner for purposes of
this section if such Participant is a 5-percent owner as defined
in Code Section 416(i) (determined in accordance with Code
Section 416 but without regard to whether the Plan is top-heavy)
at any time during the Plan Year ending with or within the
calendar year in which such owner attains age 66 1/2 or any
subsequent Plan Year.
Once distributions have begun to a 5-percent owner under this
section they must continue to be distributed even if the
Participant ceases to be a 5-percent owner in a subsequent year.
b) The optional forms of retirement benefit shall be the following:
a straight life annuity; single life annuities with certain
periods of five ten or fifteen years; a single life annuity with
installment refund; survivorship life annuities with installment
refund and survivorship percentages of 50, 66 2/3 or 100; fixed
period annuities for any period of whole months which is not less
than 60 and does not exceed the Life Expectancy of the
Participant and the named Beneficiary as provided in (d) below
where the Life Expectancy is not recalculated; and a series
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of installments chosen by the Participant with a minimum payment
each year beginning with the year the Participant turns age 70
1/2. The payment for the first year in which a minimum payment is
required will be made by April 1 of the following calendar year.
The payment for the second year and each successive year will be
made by December 31 of that year. The minimum payment will be
based on a period equal to the Joint and Last Survivor Expectancy
of the Participant and the Participant's spouse if any as
provided in (d) below where the Joint and Last Survivor
Expectancy is recalculated. The balance of the Participant's
Vested Account if any will be payable on the Participant's death
to his Beneficiary in a single sum. The Participant may also
elect to receive his Vested Account in a single-sum Payment.
Election of an optional form is subject to the qualified election
provisions of Article Vl.
Any annuity contract distributed shall be nontransferable. The
terms of any annuity contract purchased and distributed by the
Plan to a Participant or spouse shall comply with the
requirements of this Plan.
c) The optional forms of death benefit are a single-sum payment and
any annuity that is an optional form of retirement benefit.
However a series of installments shall not be available if the
Beneficiary is not the spouse of the deceased Participant.
d) Subject to the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article
VI joint and survivor annuity requirements the requirements of
this section shall apply to any distribution of a Participant's
interest and will take precedence over any inconsistent
provisions of this Plan. Unless otherwise specified the
provisions of this section apply to calendar years beginning
after December 31. 1984.
All distributions required under this section shall be determined
and made in accordance with the proposed regulations under Code
Section 401(a)(9) including the minimum distribution incidental
benefit requirement of section 1.401(a)(9)-2 of the proposed
regulations.
The entire interest of a Participant must be distributed or begin
to be distributed no later than the Participant's Required
Beginning Date.
As of the first Distribution Calendar Year distributions if not
made in a single sum may only be made over one of the following
periods (or combination thereof):
2. the life of the Participant and a Designated Beneficiary
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3. a period certain not extending beyond the Life Expectancy of
the Participant or
4. a period certain not extending beyond the Joint and Last
Survivor Expectancy of the Participant and a Designated
Beneficiary.
If the Participant's interest is to be distributed in other than
a single sum the following minimum distribution rules shall apply
on or after the Required Beginning Date:
5. Individual account:
i. If a Participant's Benefit is to be distributed over
1) a period not extending beyond the Life Expectancy
of the Participant or the Joint Life and Last
Survivor Expectancy of the Participant and the
Participant's Designated Beneficiary or
2) a period not extending beyond the Life Expectancy
of the Designated Beneficiary.
the amount required to be distributed for each calendar
year beginning with the distributions for the first
Distribution Calendar Year must be at least equal to
the quotient obtained by dividing the Participant's
Benefit by the Applicable Life Expectancy.
ii. For calendar years beginning before January 1, 1989 if
the Participant's spouse is not the Designated
Beneficiary the method of distribution selected must
assure that at least 50% of the present value of the
amount available for distribution is Paid within the
Life Expectancy of the Participant.
iii. For calendar years beginning after December 31, 1988
the amount to be distributed each year beginning with
distributions for the first Distribution Calendar Year
shall not be less than the quotient obtained by
dividing the Participant's Benefit by the lesser of
1) the Applicable Life Expectancy or
2) if the Participant's spouse is not the
Designated Beneficiary the applicable divisor
determined from the table set forth in Q&A-4
of section 1.401(a)(9)-2 of the proposed
regulations.
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Distributions after the death of the
Participant shall be distributed using the
Applicable Life Expectancy in (5)(i) above
as the relevant divisor without regard to
proposed regulations section 1.401(a)(9)-2.
iv. The minimum distribution required for the Participant's
first Distribution Calendar Year must be made on or
before the Participant's Required Beginning Date. The
minimum distribution for the Distribution Calendar Year
for other calendar years including the minimum
distribution for the Distribution Calendar Year in
which the Participant's Required Beginning Date occurs
must be made on or before December 31 of that
Distribution Calendar Year.
6 Other forms:
i. If the Participant's benefit is distributed the form of
an annuity purchased from an insurance company
distributions thereunder shall be made in accordance
with requirements of Code Section 401(a)(9) and the
proposed regulations thereunder.
e) Death distribution provisions:
1. Distribution beginning before death. If the Participant dies
after distribution of his interest has begun the remaining
portion of such interest will continue to be distributed at
least as rapidly as under the method of distribution being
used prior to the Participant's death.
2. Distribution beginning after death. If the Participant dies
before distribution of his interest begins distribution of
the Participant's entire interest shall be completed by
December 31 of the calendar year containing the fifth
anniversary of the Participant's death except to the extent
that an election is made to receive distributions in
accordance with (i) or (ii) below:
i. if any portion of the Participant's interest is payable
to a Designated Beneficiary distributions may be made
over the life or over a period certain not greater than
the Life Expectancy of the Designated Beneficiary
commencing on or before December 31 of the calendar
year immediately following the calendar year in which
the Participant died;
ii. if the Designated Beneficiary is the Participant's
surviving spouse the date distributions are required to
begin in accordance with (i) above shall not be earlier
than the later of
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1) December 31 of the calendar year immediately
following the calendar year in which the
Participant died and
2) December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
If the Participant has not made an election pursuant to this
(e)(2) by the time of his death the Participant's Designated
Beneficiary must elect the method of distribution no later
than the earlier of
iii. December 31 of the calendar year in which distributions
would be required to begin under this subparagraph or
iv. December 31 of the calendar year which contains the
fifth anniversary of the date of death of the
Participant.
If the Participant has no Designated Beneficiary, or if the
Designated Beneficiary does not elect a method of
distribution, distribution of the Participant's entire
interest must be completed by December 31 of the calendar
year containing the fifth anniversary of the participant's
death.
3. For purposes of (e)(2) above, if the surviving spouse dies
after the Participant, but before payments to such spouse
begin, the provisions of (e)(2) above, with the exception of
(e)(2)(ii) therein, shall be applied as if the surviving
spouse were the Participant.
4. For purposes of this (e), any amount paid to a child of the
Participant will be treated as if it had been paid to the
surviving spouse if the amount becomes payable to the
surviving spouse when the child reaches the age of majority.
5. For purposes of this (e), distribution of a Participant's
interest is considered to begin on the Participant's
Required Beginning Date (or if (e)(3) above is applicable,
the date distribution is required to begin to the surviving
spouse pursuant to (e)(2) above). If distribution in the
form of an annuity irrevocably commences to the Participant
before the Required Beginning Date, the date distribution is
considered to begin is the date distribution actually
commences.
SECTION 6.02A--DISTRIBUTIONS IN QUALIFYING EMPLOYER SECURITIES.
In lieu of the distributions permitted under Section 6.02 above, any
portion of the Participant's Vested Account held in Qualifying Employer
Securities may be distributed in kind. Fractional shares shall be paid in cash
valued as of the most recent Valuation Date; the
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distribution shall include any dividends (cash or stock) on such whole shares or
any additional shares received as a result of a stock split or any other
adjustment to such whole shares since the Valuation Date preceding the date of
distribution.
SECTION 6.03--ELECTION PROCEDURES.
The Participant, Beneficiary, or spouse shall make any election under
this section in writing. The Plan Administrator may require such individual to
complete and sign any necessary documents as to the provisions to be made. Any
election permitted under (a) and (b) below shall be subject to the qualified
election provisions of (c) below
a) Retirement Benefits. A Participant may elect his Beneficiary or
Contingent Annuitant and may elect to have retirement benefits
distributed under any of the optional forms of retirement benefit
described in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article Vl.
b) Death Benefits. A Participant may elect his Beneficiary and may
elect to have death benefits distributed under any of the
optional forms of death benefit described in the OPTIONAL FORMS
OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of Article
Vl.
If the Participant has not elected an optional form of
distribution for the death benefit payable to his Beneficiary,
the Beneficiary may, for his own benefit, elect the form of
distribution, in like manner as a Participant.
The Participant may waive the Qualified Preretirement Survivor
Annuity by naming someone other than his spouse as Beneficiary.
In lieu of the Qualified Preretirement Survivor Annuity described
in the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI the
spouse may for his own benefit waive the Qualified Preretirement
Survivor Annuity by electing to have the benefit distributed
under any of the optional forms of death benefit described in the
OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS
SECTION of Article VI.
c) Qualified Election. The Participant Beneficiary or spouse may
make an election at any time during the election period. The
Participant Beneficiary or spouse may revoke the election made
(or make a new election) at any time and any number of times
during the election period. An election is effective only if it
meets the consent requirements below.
The election period as to retirement benefits is the 90-day
period ending on the Annuity Starting Date. An election to waive
the Qualified Joint and Survivor Form may not be made before the
date he is provided with the notice of the ability
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to waive the Qualified Joint and Survivor Form. If the
Participant elects the series of installments he may elect on any
later date to have the balance of his Vested Account paid under
any of the optional forms of retirement benefit available under
the Plan. His election period for this election is the 90-day
period ending on the Annuity Starting Date for the optional form
of retirement benefit elected.
A Participant may make an election as to death benefits at any
time before he dies. The spouse's election period begins on the
date the Participant dies and ends on the date benefits begin.
The Beneficiary's election period begins on the date the
Participant dies and ends on the date benefits begin. An election
to waive the Qualified Preretirement Survivor Annuity may not be
made by the Participant before the date he is provided with the
notice of the ability to waive the Qualified Preretirement
Survivor Annuity. A Participant's election to waive the Qualified
Preretirement Survivor Annuity which is made before the first day
of the Plan Year in which he reaches age 35 shall become invalid
on such date. An election made by a Participant after he ceases
to be an Employee will not become invalid on the first day of
the Plan Year in which he reaches age 35 with respect to death
benefits from that part of his Account resulting from
Contributions made before he ceased to be an Employee.
If the Participant's Vested Account has at any time exceeded
$3,500 any benefit which is (1) immediately distributable or (2)
payable in a form other than a Qualified Joint and Survivor Form
or a Qualified Preretirement Survivor Annuity requires the
consent of the Participant and the Participant's spouse (or where
either the Participant or spouse has died the survivor). The
consent of the Participant or spouse to a benefit which is
immediately distributable must not be made before the date the
Participant or spouse is provided with the notice of the ability
to defer the distribution. Such consent shall be made in writing.
The consent shall not be made more than 90 days before the
Annuity Starting Date. Spousal consent is not required for a
benefit which is immediately distributable in a Qualified Joint
and Survivor Form. Furthermore if spousal consent is not required
because the Participant is electing an optional form of
retirement benefit that is not a life annuity pursuant to (d)
below only the Participant need consent to the distribution of a
benefit payable in a form that is not a life annuity and which is
immediately distributable. Neither the consent of the Participant
nor the Participant's spouse shall be required to the extent that
a distribution is required to satisfy Code Section 401(a)(9) or
Code Section 415. In addition upon termination of this Plan if
the Plan does not offer an annuity option (purchased from a
commercial provider) the Participant's Account balance may
without the Participant's consent be distributed to the
Participant or transferred to another defined contribution plan
(other than an employee stock ownership plan as defined in Code
Section 4975(e)(7)) within the same Controlled Group. A benefit
is immediately distributable if any part of the benefit could be
distributed to the Participant (or surviving spouse) before the
Participant attains (or would have attained if not deceased) the
older of Normal Retirement Age or age 62. If the Qualified Joint
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and Survivor Form is waived, the spouse has the right to consent
only to a specific Beneficiary or a specific form of benefit. The
spouse can relinquish one or both such rights. Such consent shall
be made in writing. The consent shall not be made more than 90
days before the Annuity Starting Date. If the Qualified
Preretirement Survivor Annuity is waived the spouse has the right
to limit consent only to a specific Beneficiary. Such consent
shall be in writing. The spouse's consent shall be witnessed by a
plan representative; or notary public. The spouse's consent must
acknowledge the effect of the election including that the spouse
had the right to limit consent only to a specific Beneficiary or
a specific form of benefit, if applicable, and that the
relinquishment of one or both such rights was voluntary. Unless
the consent of the spouse expressly permits designations by the
Participant without a requirement of further consent by the
spouse, the spouse's consent must be limited to the form of
benefit, if applicable, and the Beneficiary (including any
Contingent Annuitant), class of Beneficiaries, or contingent
Beneficiary named in the election. Spousal consent is not
required, however, if the Participant establishes to the
satisfaction of the plan representative that the consent of the
spouse cannot be obtained because there is no spouse or the
spouse cannot be located. A spouse's consent under this paragraph
shall not be valid with respect to any other spouse. A
Participant may revoke a prior election without the consent of
the spouse. Any new election will require a new spousal consent
unless the consent of the spouse expressly permits such election
by the Participant without further consent by the spouse. A
spouse's consent may be revoked at any time within the
Participant's election period.
d) Special Rule for Profit Sharing Plan. As provided in the
preceding provisions of the Plan, if a Participant has a spouse
to whom he has been continuously married throughout the one-year
period ending on the date of his death, the Participant's Vested
Account, including the proceeds payable under any Insurance
Policy on the Participant's life, shall be paid to such spouse.
However, if there is no such spouse or if the surviving spouse
has already consented in a manner conforming to the qualified
election requirements in (c) above, the Vested Account shall be
payable to the Participant's Beneficiary in the event of the
Participant's death.
The Participant may waive the spousal death benefit described
above at any time provided that no such waiver shall be effective
unless it satisfies the conditions of (c) above (other than the
notification requirement referred to therein) that would apply to
the Participant's waiver of the Qualified Preretirement Survivor
Annuity.
Because this is a profit sharing plan which pays death benefits
as described above, this subsection (d) applies if the following
condition is met: with respect to the Participant, this Plan is
not a direct or indirect transferee after December 31, 1984, of a
defined benefit plan, money purchase plan (including a target
plan), stock bonus plan or profit sharing plan which is subject
to the survivor annuity requirements of Code Section 401 (a)(11)
and Code Section 417. If the above condition is met, spousal
consent is not required for electing a benefit payable in a
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form that is not a life annuity. If the above condition is not
met the consent requirements of this article shall be operative.
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SECTION 6.04--NOTICE REQUIREMENTS.
a) Optional forms of retirement benefit. The Plan Administrator
shall furnish to the Participant and the Participant's spouse a
written explanation of the optional forms of retirement benefit
in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI, including the material
features and relative values of these options in a manner that
would satisfy the notice requirements of Code Section 417(a)(3)
and the right of the Participant and the Participant's spouse to
defer distribution until the benefit is no longer immediately
distributable. The Plan Administrator shall furnish the written
explanation by a method reasonably calculated to reach the
attention of the Participant and the Participant's spouse no less
than 30 days and no more than 90 days before the Annuity Starting
Date.
b) Qualified Joint and Survivor Form. The Plan Administrator shall
furnish to the Participant a written explanation of the
following: the terms and conditions of the Qualified Joint and
Survivor Form; the Participant's right to make and the effect of
an election to waive the Qualified Joint and Survivor Form; the
rights of the Participant's spouse; and the right to revoke an
election and the effect of such a revocation. The Plan
Administrator shall furnish the written explanation by a method
reasonably calculated to reach the attention of the Participant
no less than 30 days and no more than 90 days before the Annuity
Starting Date.
After the written explanation is given, a Participant or spouse
may make written request for additional information. The written
explanation must be personally delivered or mailed (first class
mail postage prepaid) to the Participant or spouse within 30 days
from the date of the written request. The Plan Administrator does
not need to comply with more than one such request by a
Participant or spouse.
The Plan Administrator's explanation shall be written in
nontechnical language and will explain the terms and conditions
of the Qualified Joint and Survivor Form and the financial effect
upon the Participant's benefit (in terms of dollars per benefit
payment) of electing not to have benefits distributed in
accordance with the Qualified Joint and Survivor Form.
c) Qualified Preretirement Survivor Annuity. As required by the Code
and Federal regulation, the Plan Administrator shall furnish to
the Participant a written explanation of the following: the terms
and conditions of the Qualified
Preretirement Survivor Annuity; the Participant's right to make,
and the effect of, an election to waive the Qualified
Preretirement Survivor Annuity; the rights of the Participant's
spouse; and the right to revoke an election and the effect of
such a revocation. The Plan Administrator shall furnish the
written explanation by a method reasonalby calculated to reach
the attention of the Participant within the applicable period.
The applicable period for a Participant is whichever of the
following periods ends last:
1. the period beginning one year before the date the individual
becomes a Participant and ending one year after such date:
or
2. the period beginning one year before the date the
Participant's spouse is first entitled to a Qualified
Preretirement Survivor Annuity and ending one year after
such date.
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If such notice is given before 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 an additional notice
shall be given within such period. If a Participant ceases to be
an Employee before attaining age 35 an additional notice shall be
given within the period beginning one year before the date he
ceases to be an Employee and ending one year after such date.
After the written explanation is given a Participant or spouse
may make written request for additional information. The written
explanation must be personally delivered or mailed (first class
mail postage prepaid) to the Participant or spouse within 30 days
from the date of the written request. The Plan Administrator does
not need to comply with more than one such request by a
Participant or spouse.
The Plan Administrator 's explanation shall be written in
nontechnical language and will explain the terms and conditions
of the Qualified Preretirement Survivor Annuity and the financial
effect upon the spouse's benefit (in terms of dollars per benefit
payment) of electing not to have benefits distributed in
accordance with the Qualified Preretirement Survivor Annuity.
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ARTICLE VII
TERMINATION OF PLAN
The Employer expects to continue the Plan indefinitely but reserves the
right to terminate the Plan in whole or in part at any time upon giving written
notice to all parties concerned. Complete discontinuance of Contributions under
the Plan constitutes complete termination of Plan.
The Account of each Participant shall be fully (100%) vested and
nonforfeitable as of the effective date of complete termination of Plan. The
Account of each Participant who is included in the group of Participants deemed
to be affected by the partial termination of the Plan shall be fully ( 100%)
vested and nonforfeitable as of the effective date of the partial Plan
termination. The Participant's Account shall continue to participate in the
earnings credited, expenses charged and any appreciation or depreciation of the
Investment Fund until the Vested Account is distributed. A distribution under
this article will be a retirement benefit and shall be distributed to the
Participant according to the provisions of Article VI.
A Participant's Account which does not result from Contributions which
are used to compute the Actual Deferral Percentage as defined in the EXCESS
AMOUNTS SECTION of Article III may be distributed to the Participant after the
effective date of the complete or partial Plan termination. A Participant's
Account resulting from Contributions which are used to compute such percentage
may be distributed upon termination of the Plan without the establishment or
maintenance of another defined contribution plan other than an employee stock
ownership plan (as defined in Code Section 4975(e) or Code Section 409) or a
simplified employee pension plan (as defined in Code Section 40S(k)). Such a
distribution made after March 31 1988 must be in a single sum.
Upon complete termination of this Plan no more Employees shall become
Participants and no more Contributions shall be made.
The assets of this Plan shall not be paid to the Employer at any time
except that after the satisfaction of all liabilities under the Plan any assets
remaining may be paid to the Employer. The payment may not be made if it would
contravene any provision of law.
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ARTICLE VIII
ADMINISTRATION OF PLAN
SECTION 8.01--ADMINISTRATION.
Subject to the provisions of this article, the Plan Administrator has
complete control of the administration of the Plan. The Plan Administrator has
all the powers necessary for it to properly carry out its administrative duties.
Not in limitation, but in amplification of the foregoing the Plan Administrator
has the power to construe the Plan, including ambiguous provisions, and to
determine all questions that may arise under the Plan, including all questions
relating to the eligibility of Employees to participate in the Plan and the
amount of benefit to which any Participant, Beneficiary, spouse or Contingent
Annuitant may become entitled. The Plan Administrator's decisions upon all
matters within the scope of its authority shall be final.
Unless otherwise set out in the Plan or Group Contract, the Plan
Administrator may delegate recordkeeping and other duties which are necessary
for the administration of the Plan to any person or firm which agrees to accept
such duties. The Plan Administrator shall be entitled to rely upon all tables,
valuations, certificates and reports furnished by the consultant or actuary
appointed by the Plan Administrator and upon all opinions given by any counsel
selected or approved by the Plan Administrator.
The Plan Administrator shall receive all claims for benefits by
Participants, former Participants, Beneficiaries, spouses, and Contingent
Annuitants. The Plan Administrator shall determine all facts necessary to
establish the right of any Claimant to benefits and the amount of those benefits
under the provisions of the Plan. The Plan Administrator may establish rules and
procedures to be followed by Claimants in filing claims for benefits, in
furnishing and verifying proofs necessary to determine age, and in any other
matters required to administer the Plan
Each Participant shall be entitled to direct the Trustee as to the
exercise of all voting powers over shares allocated to his Account. The Trustee
will vote such shares only as directed by the Participant. If a Participant
fails to give timely directions as to the voting of shares of stock of Praxair,
Inc., the Trustee will vote such shares in the same proportion as it votes the
shares for which the Trustee receives directions.
In the event of a tender or exchange offer with respect to any common
stock of Praxair, Inc. held in a Participant's Qualifying Employer Securities
Account, the Participant's Qualifying Employer Securities Account may acquire
other securities issued by Praxair, Inc. in exchange for, or in connection with,
such common stock of Praxair. Inc.
In the event that a tender offer is made for some or all of the shares
of Praxair, Inc., each Participant shall have the right to direct whether those
shares allocated to his Account, whether or not vested, shall be tendered. This
right shall be exercised in the manner set forth herein. In the absence of a
written directive from or election by a Participant to the Plan Administrator,
the Plan Administrator shall direct the Trustee not to tender such shares.
Because the choice is to be given to the Participants, the Plan Administrator
and the Trustee shall not have fiduciary
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responsibility with respect to the decision to tender or not or whether to
tender all of such shares or only a portion thereof.
In order to facilitate the decision of Participants whether to tender
their shares in a tender offer (or how many shares to tender!, the Plan
Administrator shall provide election forms for the Participants, whereby they
may elect to tender or not and whereby they may elect to tender all or a portion
of such shares. Unless otherwise limited by Federal securities law, such
election may be made or changed at any time prior to the date before the
expiration date of the tender offer (with extensions); any election or change in
election must be received by the Plan Administrator, or designated
representative of the Plan Administrator, on or before the day preceding the
expiration date of the tender offer (with extensions, if any). The Plan
Administrator may develop procedures to facilitate Participants' choices, such
as the use of facsimile transmission for the Employees located in areas
physically remote from the Plan Administrator. The election shall be binding on
the Plan Administrator and the Trustee. The Plan Administrator shall make forms
and other communications related to the tender offer to all Participants as soon
as practicable following the announcement of the tender offer, including mailing
such notice and form to Participants and posting such notice in places designed
to be reviewed by Participants.
As to shares which are not allocated to the Accounts of any
Participant, all such shares (in the aggregate) shall be tendered or not as the
majority of the shares held by Participants and directed by Participants are
tendered or not. The Plan Administrator shall direct the Trustee to tender all
such unallocated shares or not, in accordance with the elections of the
Participant having an allocation of the majority of the shares under the Plan.
SECTION 8.02--RECORDS.
All acts and determinations of the Plan Administrator shall be duly
recorded. All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator's
custody.
Writing (handwriting, typing, printing), photostatting, photographing,
microfilming, magnetic impulse, mechanical or electrical recording or other
forms of data compilation shall be acceptable means of keeping records.
SECTION 8.03 INFORMATION AVAILABLE.
Any Participant in the Plan or any Beneficiary may examine copies of
the Plan description, latest annual report, any bargaining agreement, this Plan,
the Group Contract or any other instrument under which the Plan was established
or is operated. The Plan Administrator shall maintain all of the items listed in
this section in its office, or in such other place or places as it may designate
in order to comply with governmental regulations. These items may be examined
during reasonable business hours. Upon the written request of a Participant or
Beneficiary receiving benefits under the Plan, the Plan Administrator will
furnish him with a copy of any of these items. The Plan Administrator may make a
reasonable charge to the requesting person for the copy.
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SECTION 8.04-CLAIM AND APPEAL PROCEDURES
A Claimant must submit any required forms and pertinent information
when making a claim for benefits under the Plan.
If a claim for benefits under the Plan is denied the Plan Administrator
shall provide adequate written notice to the Claimant whose claim for benefits
under the Plan has been denied. The notice must be furnished within 90 days of
the date that the claim is received by the Plan Administrator. The Claimant
shall be notified in writing within this initial 90-day period if special
circumstances require an extension of time needed to process the claim and the
date by which the Plan Administrator's decision is expected to be rendered. The
written notice shall be furnished no later than 180 days after the date the
claim was received by the Plan Administrator.
The Plan Administrator's notice to the Claimant shall specify the
reason for the denial; specify references to pertinent Plan provisions on which
denial is based; describe any additional material and information needed for the
Claimant to perfect his claim for benefits; explain why the material and
information is needed; inform the Claimant that any appeal he wishes to make
must be made in writing to the Plan Administrator within 60 days after receipt
of the Plan Administrator's notice of denial of benefits and that failure to
make the written appeal within such 60-day period shall render the Plan
Administrator's determination of such denial final binding and conclusive
If the Claimant appeals to the Plan Administrator the Claimant or his
authorized representative may submit in writing whatever issues and comments the
Claimant or his representative feels are pertinent. The Claimant or his
authorized representative may review pertinent Plan documents. The Plan
Administrator shall reexamine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The Plan Administrator shall advise the Claimant of its decision
within 60 days of his written request for review unless special circumstances
(such as a hearing) would make rendering a decision within the 60-day limit
unfeasible. The Claimant must be notified within the 60-day limit if an
extension is necessary. The Plan Administrator shall render a decision on a
claim for benefits no later than 120 days after the request for review is
received.
SECTION 8.05--UNCLAIMED VESTED ACCOUNT PROCEDURE.
At the time the Participant's Vested Account is distributable to the
Participant, spouse or Beneficiary without his consent according to the
provisions of Article VI or Article IX, the Plan Administrator, by certified or
registered mail addressed to his last known address and in accordance with the
notice requirements of Article VI will notify him of his entitlement to a
benefit. If the Participant spouse or Beneficiary fails to claim the Vested
Account or make his whereabouts known in writing within six months from the date
of mailing the notice, the Plan Administrator may treat such unclaimed Vested
Account as a forfeiture and apply it according to the forfeiture provisions of
Article III. If Article III contains no forfeiture provisions such amount will
be applied to reduce the earliest Employer Contributions due after the
forfeiture arises.
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If a Participant's Vested Account is forfeited according to the
provisions of the above paragraph and the Participant his spouse or his
Beneficiary at any time make a claim for benefits the forfeited Vested Account
shall be reinstated unadjusted for any gains or losses occurring after the date
it was forfeited. The reinstated Vested Account shall then be distributed to the
Participant spouse or Beneficiary according to the preceding provisions of the
Plan.
SECTION 8.06--DELEGATION OF AUTHORlTY.
All or any part of the administrative duties and responsibilities under
this article may be delegated by the Plan Administrator to an Administration and
Investment Committee (the "Committee" or "Administration Committee"). The duties
and responsibilities delegated to the Committee are set forth in the remainder
of this article.
SECTION 8.07-ADMINISTRATION COMMITTEE.
There is hereby created an Administration Committee which shall consist
of the Chief Financial Officer of Praxair, Inc. (or his/her designee whom he/she
has appointed in writing) and not less than two (2) additional members who are
appointed by and serve at the pleasure of the Finance and Pension Committee of
the Board of Directors of Praxair, Inc. (the "Finance and Pension Committee")
The Finance and Pension Committee may, at any time, fill vacancies or require
the resignation of one or more of the members of a Committee with or without
cause. In the event that a vacancy or vacancies shall occur on the Committee,
the remaining member or members shall act as the Committee until the Pension and
Finance Committee fills such vacancy or vacancies. No person shall be ineligible
to be a member of a Committee because he/she is, was or may become entitled to
benefits under the Plan or because he/she is a director and/or officer of an
Employer or Member of the Controlled Group or a Trustee; provided, that no
Participant who is a member of the Committee shall participate in any
determination by the Committee specifically relating to the disposition of
his/her own Account (including any determination with respect to a hardship
withdrawal or a loan pursuant to Sections 5.05 and 5.06, respectively).
SECTION 8.08-LIMITATION OF LIABILITY; INDEMNITY
8.08.1 Except as otherwise provided by law, no person who is a member
of the Committee, or any Employee, director or officer of any Employer
or member of a Controlled Group, may incur any liability whatsoever on
account of any matter connected with or related to the Plan or the
administration of the Plan.
8.08.2 Praxair, Inc. and Praxair Distribution, Inc. shall indemnify
and save harmless each member of the Committee, and each Employee,
director or officer of any Employer or member of a Controlled Group,
from and against any and all loss, liability, claim, damage, cost and
expense which may arise by reason of, or be based upon, any matter
connected with or related to the Plan or the administration of the
Plan (including, but not limited to, any and all expenses whatsoever
reasonably incurred in investigating,
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preparing or defending against any litigation, commenced or
threatened, or in settlement of any such claim whatsoever), unless
such person shall have acted in bad faith or been guilty of willful
misconduct or gross negligence in respect of his duties, actions or
omissions in respect of the Plan.
SECTION 8.09-COMPENSATION AND EXPENSES.
The members of the Committee shall serve without compensation for their
services as such members. All expenses reasonably incurred by the Committee
shall be treated as an expense of the Trust Fund of the Plan unless paid by an
Employer or Praxair, Inc. The members of the Committee shall serve without bond
unless an Employer, Praxair, Inc. or the provisions of any applicable laws shall
require otherwise, in which event an Employer or Praxair, Inc. shall pay the
premium thereon.
SECTION 8.10-VOTING CHAIRMEN, SUBCOMMITTEES.
8.10.1 If there are fewer than five members of the Committee at any
time, the Committee may do any act which the Plan authorizes or
requires the Committee to do only upon the unanimous consent of the
members of the Committee eligible to vote on such act. If there are
five or more members of the Committee at any time, a majority of the
members of the Committee at the time in office may do any act which
the Plan authorizes or requires the Committee to do.
8.10.2 The action of the members expressed from time to time by a vote
at a meeting, or in writing without a meeting, or by conference
telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time,
shall constitute the action of the Committee and shall have the same
effect for all purposes as if assented to by all members at the time
in office. Where action is taken by members of the Committee by
conference telephone or similar communications equipment, such action
shall be confirmed in writing by such members as soon as practicable
thereafter. The Secretary shall maintain minutes reflecting Committee
meetings and shall cause each action taken in writing without a
meeting, and each written confirmation of action taken by conference
telephone or similar communications equipment, to be included in the
minutes of the committee. Any member who dissents from an action taken
by the committee may have such dissent recorded in the minutes along
with the reasons therefor. The Secretary shall distribute the minutes
to the members of the Committee as soon as practicable after a
Committee meeting or after Committee action taken without a meeting.
8.10.3 The Chief Financial Officer of Praxair, Inc. or his/her
designee shall be the Chairman of the Committee. The members of the
committee shall elect a Secretary who may, but need not be, a member
of the Committee, and they may appoint from their number such
subcommittees as they shall determine.
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SECTION 8.11-PAYMENT OF BENEFITS
The Committee, through its designee, the Human Resources Department of
Praxair Distribution, Inc., shall advise the Trustees in writing with respect to
all benefits which become payable under the terms of the Plan and shall direct
the Trustees to pay such benefits. The Committee shall be authorized to give to
any party such instructions as may be necessary or appropriate in order to
provide for the payment of benefits in accordance with the Plan.
SECTION 8.12 - POWERS AND AUTHORITY; ACTION CONCLUSIVE
Except as otherwise expressly provided in the Plan or in any trust
agreement relating to the Plan, or by the Board of Directors of Praxair
Distribution, Inc., the Committee shall have such Powers as may be necessary to
discharge its duties under the Plan, including:
8.12.1 The Committee shall be responsible for the administration of
the Plan.
8.12.2 The Committee shall have all powers necessary or helpful for
the carrying out of its responsibilities, and the decisions or action
of the committee in good faith in respect of any maker hereunder shall
be conclusive and binding upon all parties concerned.
8.12.3 The Committee may delegate to one or more of its members or any
other person (a "Designee") the right to act on its behalf in any
matter connected with the administration of the Plan.
8.12.4 Without limiting the generality of the foregoing, the Committee
shall have full discretionary authority to:
8.12.4.1 Interpret and construe the Plan, to determine all
questions with regard to employment, eligibility service,
credited service, annual compensation, and such other factual
matters as dates of birth, retirement and other similarly related
matters for purposes of the Plan. The Committee's or its
Designee's determination of all questions arising under the Plan
shall be conclusive upon all Participants, the Board of
Directors, Employer, the Trustee, and other interested parties;
8.12.4.2 Determine all questions and hear all appeals relating to
the administration of the Plan (i) when disputes arise between
the Plan and a Participant or his/her Beneficiary, spouse or
legal representatives, and (ii) whenever the Committee deems it
advisable to determine such questions in order to promote the
uniform administration of the Plan;
8.12.4.3 Make rules and regulations for the administration of the
Plan which are not inconsistent with the terms and provisions of
the Plan, and fix the annual accounting period of any trust
established relating to the Plan as required for tax purposes;
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8.12.4.4 Modify or amend the Plan, provided the annual cost of
such modification or amendment does not exceed two million
dollars (S2,000,000);
8.12.4.5 Prescribe procedures to be followed by Participants and
Beneficiaries filing applications for benefits;
8.12.4.6 Prepare and distribute to Participants and their
Beneficiaries information explaining the Plan;
8.12.4.7 Appoint from their number such sub-committees with such
powers as they shall determine and to authorize one or more of
their number to exercise any of the Committee's powers,
ministerial or discretionary, necessary to carry out the
provisions of the Plan;
8.12.4.8 Appoint or terminate the engagement of any Trustee for
the Plan;
8.12.4.9 Instruct the Trustee to make disbursements pursuant to
the Plan;
8.12.4.10 Receive and review reports of disbursements from the
Trust Fund made by the Trustees;
8.12.4.11 Establish investment policies and related guidelines;
8.12.4.12 Appoint or terminate the engagement of an independent
investment manager or managers and such other professional
advisor or advisors as it may deem necessary or desirable;
8.12.4.13 Monitor the performance of each Trustee and any
Investment Manager for the assets of the Plan and make regular
reports to the Finance and Pension Committee regarding the same.
In order to accomplish this, the Committee shall meet at least
annually with each Trustee and with any Investment Manager, at
which time the Committee shall request each Trustee or Investment
Manager to present a full report on the financial position of the
Plan assets under the control of such Trustee or Investment
Manager;
8.12.4.14 Change the investment options available under the Plan;
8.12.4.15 Receive and review the periodic audit of the Plan made
by a Certified Public Accountant where mandated by ERISA;
8.12.4.16 In addition to any other powers granted in the Plan to
the Committee, the Committee shall have discretionary authority
to determine whether and to what extent Participants and
Beneficiaries are entitled to benefits and to construe disputed
or doubtful Plan terms. The Committee shall be deemed to have
properly
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exercised such authority unless they have abused their discretion
under the Plan by acting arbitrarily and capriciously; and
8.12.4.17 The Committee may request the Board of Directors of
Praxair Distribution, Inc. to review any maker or policy issue
the Committee deems appropriate.
With respect to the powers enumerated in subsections (3), (S), (6), and
(9), and with respect to making all initial determinations of benefit
eligibility under the Plan, the Committee has designated the Human Resources
Department of Praxair Distribution, Inc. to act on its behalf.
The foregoing list of powers is not intended to be either complete or
exclusive, and the Committee shall, in addition, have such powers as may be
necessary for the performance of its duties under the Plan and any trust
established relating to the Plan.
Other than by making formal amendments to the Plan, the Committee shall
have no power to add to, subtract from, or modify any of the terms of the Plan,
or to change or add to any benefits provided by the Plan, or to waive or fail to
apply any requirements for eligibility for a benefit under the Plan.
The members of the Committee shall discharge their duties solely in the
interests of Participants and their beneficiaries and (i) for the exclusive
purpose of providing benefits to such persons and defraying reasonable expenses
of administering the Plan and (ii) 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 like character and with like aims.
SECTION 8.13 - COUNSEL AND AGENTS
The Committee may employ such counsel, including legal counsel,
accountants, investment advisors, physicians, agents and such clerical and other
services as it may require in carrying out the provisions of the Plan and
applicable law, and shall charge the fees, charges and costs resulting from such
employment as an expense of the Trust Fund unless paid by an Employer. Unless
otherwise provided by law, any person so employed by a committee may be legal or
other counsel to an Employer, a member of the Controlled Group, a member of a
Committee or an officer or member of the Board of Directors of an Employer or a
member of the Controlled Group.
SECTION 8.14 - RELIANCE ON INFORMATION
The members of the Committee and any Employer and its officers,
directors and employees shall be entitled to rely upon all tables, valuations,
certificates, opinions, and reports furnished by any accountant, trustee,
insurance company, counsel or other expert who shall be engaged by an Employer
or the Committee, and the members of the Committee and any
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Employer and its officers, directors and employees shall be fully protected in
respect of any action taken or suffered by them in good faith in reliance
thereon, and all action so taken or suffered shall be conclusive upon all
persons affected thereby.
SECTION 8.15 - FIDUCIARIES
The provisions of this Section 8.15 shall apply notwithstanding any
contrary provisions of the Plan or the Trust Agreement.
8. 15.1 The named Fiduciaries under the Plan shall be the members of
the Committee, who shall be Named Fiduciaries with respect to control
or management of the assets of the Plan, and who shall have authority
to control or manage the operation and administration of the Plan,
except with respect to those Matters which under the Plan or the Trust
Agreement are the responsibility, or subject to the authority, of the
Trustee for which Participants have been designated as Named
Fiduciaries.
8.15.2 The Named Fiduciaries under the Plan shall have the right,
which shall be exercised in accordance with the procedures set forth
in Section 8.10.1 and/or in the Trust Agreement for action by the
Committee, to allocate responsibilities, fiduciary or otherwise, among
Named Fiduciaries, and the Named Fiduciaries (or any of them to whom
such right shall be allocated) shall have the right to designate
persons other than Named Fiduciaries to carry out responsibilities,
fiduciary or otherwise, under the Plan.
8.15.3 The members of the Committee shall together establish and carry
out, or cause to be provided by those persons (including without
limitation, any Investment Manager, Trustee or Insurer) to whom
responsibility or authority therefor has been allocated or delegated
in accordance with this Plan or the Trust Agreement, a funding policy
and method consistent with the objectives of the Plan and the
requirements of ERISA. For such purposes, the Committee shall, at a
meeting duly called for the purpose, establish a funding policy and
method which satisfies the requirements of ERISA, and shall meet
annually at a stated time of the year to review such funding policy
and method. All actions taken with respect to such funding policy and
method and the reasons therefor shall be recorded in the minutes of
the meetings of the Committee.
8.15.4 Any person or group of persons may serve in more than one
fiduciary capacity with respect to the Plan.
8.15.5 Any named fiduciary under the Plan, and any fiduciary
designated by a Named Fiduciary pursuant to Section 8.15 to whom such
power is granted by a Named Fiduciary under the Plan, may employ one
or more persons to render advice with regard to any responsibility
such fiduciary has under the Plan.
8.15.6 The Committee, or such of them to whom such power shall be
allocated, may appoint an Investment Manager or Managers, as defined
in section 3(38) of ERISA, to manage (including the power to acquire,
invest and dispose of) any assets of the Plan.
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8.15.7 Except to the extent otherwise provided by law, if any duty or
responsibility of a Named Fiduciary has been allocated or delegated to
any other person in accordance with any provision of this Plan or of
the Trust Agreement, then such Named Fiduciary shall not be liable for
an act or omission of such person in carrying out such duty or
responsibility.
SECTION 8.16 - NOTICES AND ELECTIONS
An Employee shall deliver to the committee all directions, orders,
designations, notices or other Communications on appropriate forms to be
furnished by the Committee. The Committee shall also receive notices or other
communications for Participants from the Trustee and transmit them to the
Participants. All elections which may be made by a Participant under this Plan
shall be made in a time, manner and form determined by the Committee unless a
specific time, manner or form is set forth in the Plan.
SECTION 8.17 - PLAN-TO-PLAN TRANSFERS
The Trustee may transfer the balance of a Participant's Accounts to the
trustees of any trust qualified under Section 401(a) of the Code. The Trustee
may make such a transfer only at the direction of the Committee,
The Trustee may accept as part of the Trust Fund property transferred
from a trust qualified under Section 401(a) of the Code. The Trustee may accept
such a transfer only at the direction of the Committee.
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ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01--AMENDMENTS.
The Employer may amend this Plan at any time, including any remedial
retroactive changes (within the specified period of time as may be determined by
Internal Revenue Service regulations) to comply with the requirements of any law
or regulation issued by any governmental agency to which the Employer is
subject. An amendment may not diminish or adversely affect any accrued interest
or benefit of Participants or their Beneficiaries or eliminate an optional form
of distribution with respect to benefits attributable to service before the
amendment nor allow reversion or diversion of Plan assets to the Employer at any
time, except as may be necessary to comply with the requirements of any law or
regulation issued by any governmental agency to which the Employer is subject.
No amendment to this Plan shall be effective to the extent that it has the
effect of decreasing a Participant's accrued benefit. However, a Participant's
Account may be reduced to the extent permitted under Code Section 412(c)(8). For
purposes of this paragraph, a Plan amendment which has the effect of decreasing
a Participant's Account or eliminating an optional form of benefit, with respect
to benefits attributable to service before the amendment shall be treated as
reducing an accrued benefit. Furthermore, if the vesting schedule of the Plan is
amended, in the case of an Employee who is a Participant as of the later of the
date such amendment is adopted or the date it becomes effective. the
nonforfeitable percentage (determined as of such date) of such Employee's
employer-derived accrued benefit will not be less than his percentage computed
under the Plan without regard to such amendment.
However, the Committee shall also have the right, subject to the same
restrictions set forth in the first Paragraph of this Section 9.01 to amend the
Plan (a) to retain the Plan's qualified status under Code Section 401(a), or to
comply with any other provision of law, or (b) in any other respect to the
extent that the annual cost of such amendments to the Plan for the Plan Year
under this clause (b), determined without regard to the effective date of such
amendments, does not exceed two million dollars ($2,000,000). The Committee
shall report to the Board of Directors of the Employer at its next meeting
regarding any amendments adopted by the Committee pursuant to this Section 9.01.
An amendment shall not decrease a Participant's vested interest in the
Plan. If an amendment to the Plan, or a deemed amendment in the case of a change
in top-heavy status of the Plan as provided in the MODIFICATION OF VESTING
REQUIREMENTS SECTION of Article X, changes the computation of the percentage
used to determine that portion of a Participant's Account attributable to
Employer Contributions which is nonforfeitable (whether directly or indirectly),
each Participant or former Participant
a) who has completed at least three Years of Service on the date the
election period described below ends (five Years of Service if
the Participant does not have at least one Hour-of-Service in a
Plan Year beginning after December 31, 1988) and
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b) whose nonforfeitable percentage will be determined on any date
after the date of the change may elect, during the election
period, to have the nonforfeitible percentage of his Account that
results from Employer Contributions determined without regard to
the amendment. This election may not be revoked. An election does
not need to be provided for any Participant or former Participant
whose nonforfeitable percentage, determined according to the Plan
provisions as changed, cannot at any time be less than the
percentage determined without regard to such change. The election
period shall begin no later than the date the Plan amendment is
adopted, or deemed adopted in the case of a change in the
top-heavy status of the Plan, and end no earlier than the
sixtieth day after the latest of the date the amendment is
adopted (deemed adopted) or becomes effective, or the date the
Participant is issued written notice of the amendment (deemed
amendment) by the Employer or the Plan Administrator
SECTION 9.02--DIRECT ROLLOVERS.
This section applies to distributions made on or after January 1, 1993.
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.
SECTION 9.03--MERGERS AND DIRECT TRANSFERS.
The Plan may not be merged or consolidated with, nor have its assets or
liabilities transferred to, any other retirement plan, unless each Participant
in the plan would (if the plan then terminated) receive a benefit immediately
after the merger, consolidation or transfer which is equal to or greater than
the benefit the Participant would have been entitled to receive immediately
before the merger, consolidation or transfer (if this Plan had then terminated).
The Employer may enter into merger agreements or direct transfer of assets
agreements with the employers under other retirement plans which are qualifiable
under Code Section 401(a), including an elective transfer, and may accept the
direct transfer of plan assets, or may transfer plan assets, as a party to any
such agreement. The Employer shall not consent to, or be a party to a merger,
consolidation or transfer of assets with a defined benefit plan if such action
would result in a defined benefit feature being maintained under this Plan.
The Plan may accept a direct transfer of plan assets on behalf of an
Eligible Employee. If the Eligible Employee is not an Active Participant when
the transfer is made, the Eligible Employee shall be deemed to be an Active
Participant only for the purpose of investment and distribution of the
transferred assets. Employer Contributions shall not be made for or allocated to
the Eligible Employee and he may not make Participant Contributions, until the
time he meets all of the requirements to become an Active Participant
The Plan shall hold, administer and distribute the transferred assets
as a part of the Plan. The Plan shall maintain a separate account for the
benefit of the Employee on whose behalf the
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Plan accepted the transfer in order to reflect the value of the transferred
assets. Unless a transfer of assets to the Plan is an elective transfer, the
Plan shall apply the optional forms of benefit protections described in the
AMENDMENTS SECTION of Article IX to all transferred assets. A transfer is
elective if: (1) the transfer is voluntary, under a fully informed election by
the Participant; (2) the Participant has an alternative that retains his Code
Section 411(d)(6) protected benefits (including an option to leave his benefit
in the transferor plan, if that plan is not terminating); (3) if the transferor
plan is subject to Code Sections 401(a)(11) and 417, the transfer satisfies the
applicable spousal consent requirements of the Code; (4) the notice requirements
under Code Section 417, requiring a written explanation with respect to an
election not to receive benefits in the form of a qualified joint and survivor
annuity, are met with respect to the Participant and spousal transfer election;
(5) the Participant has a right to immediate distribution from the transferor
plan under provisions in the plan not inconsistent with Code Section 401(a); (6)
the transferred benefit is equal to the Participant' s entire nonforfeitable
accrued benefit under the transferor plan, calculated to be at least the greater
of the single sum distribution provided by the transferor plan (if any) or the
present value of the Participant's accrued benefit under the transferor plan
payable at the plan s normal retirement age and calculated using an interest
rate subject to the restrictions of Code Section 417(e) and subject to the
overall limitations of Code Section 415; (7) the Participant has a 100%
nonforfeitable interest in the transferred benefit; and (8) the transfer
otherwise satisfies applicable Treasury Regulations.
SECTION 9.04--PROVISIONS RELATING TO THE INSURER AND OTHER PARTIES.
The obligations of an Insurer shall be governed solely by the
provisions of the Group Contract or Insurance Policy. The Insurer shall not be
required to perform any act not provided in or contrary to the provisions of the
Group Contract or Insurance Policy. See the CONSTRUCTION SECTION of this
article.
Any issuer or distributor of investment contracts or securities is
governed solely by the terms of its policies, written investment contract,
prospectuses, security instruments. and any other written agreements entered
into with the Trustee.
Such Insurer, issuer or distributor is not a party to the Plan, nor
bound in any way by the Plan provisions. Such parties shall not be required to
look to the terms of this Plan, nor to determine whether the Employer, the Plan
Administrator, the Trustee, or the Named Fiduciary have the authority to act in
any particular manner or to make any contract or agreement.
Until notice of any amendment or termination of this Plan or a change
in Trustee has been received by the Insurer at its home office or an issuer or
distributor at their principal address, they are and shall be fully protected in
assuming that the Plan has not been amended or terminated and in dealing with
any party acting as Trustee according to the latest information which they have
received at their home office or principal address.
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SECTION 9.05--EMPLOYMENT STATUS.
Nothing contained in this Plan gives an Employee the right to be
retained in the Employer's employ or to interfere with the Employer's right to
discharge any Employee.
SECTION 9.06--RIGHTS TO PLAN ASSETS.
No Employee shall have any right to or interest in any assets of the
Plan upon termination of his employment or otherwise except as specifically
provided under this Plan, and then only to the extent of the benefits payable to
such Employee in accordance with Plan provisions.
Any final payment or distribution to a Participant or his legal
representative or to any Beneficiaries, spouse or Contingent Annuitant of such
Participant under the Plan provisions shall be in full satisfaction of all
claims against the Plan, the Named Fiduciary, the Plan Administrator, the
Trustee, the Insurer, and the Employer arising under or by virtue of the Plan.
SECTION 9.07--BENEFICIARY.
Each Participant may name a Beneficiary to receive any death benefit
(other than any income payable to a Contingent Annuitant) that may arise out of
his participation in the Plan. The Participant may change his Beneficiary from
time to time. Unless a qualified election has been made, for purposes of
distributing any death benefits before Retirement Date, the Beneficiary of a
Participant who has a spouse who is entitled to a Qualified Preretirement
Survivor Annuity shall be the Participant's spouse. The Participant's
Beneficiary designation and any change of Beneficiary shall be subject to the
provisions of the ELECTION PROCEDURES SECTION of Article VI. It is the
responsibility of the Participant to give written notice to the Insurer of the
name of the Beneficiary on a form furnished for that Purpose.
With the Employer's consent, the Plan Administrator may maintain
records of Beneficiary designations for Participants before their Retirement
Dates. In that event, the written designations made by Participants shall be
filed with the Plan Administrator. If a Participant dies before his Retirement
Date, the Plan Administrator shall certify to the Insurer the Beneficiary
designation on its records for the Participant.
If, at the death of a Participant, there is no Beneficiary named or
surviving' any death benefit under the Group Contract or Insurance Policy shall
be paid under the applicable provisions of the respective documents.
SECTION 9.08--NONALIENATION OF BENEFITS.
Benefits payable under the Plan are not subject to the claims of any
creditor of any Participant, Beneficiary, spouse or Contingent Annuitant. A
Participant, Beneficiary, spouse or Contingent Annuitant does not have any
rights to alienate, anticipate, commute, pledge, encumber or assign any of such
benefits, except in the case of a loan as provided in the LOANS TO PARTICIPANTS
SECTION of Article V. The preceding sentences shall also apply to the
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creation, assignment, or recognition of a right to any benefit payable with
respect to a Participant according to a domestic relations order, unless such
order is determined by the Plan Administrator to be a qualified domestic
relations order, as defined in Code Section 414(p), or any domestic relations
order entered before January 1, 1985.
SECTION 9.09--CONSTRUCTION.
The validity of the Plan or any of its provisions is determined under
and construed according to Federal law and, to the extent permissible, according
to the laws of the state in which the Employer has its principal office. In case
any provision of this Plan is held illegal or invalid for any reason, such
determination shall not affect the remaining provisions of this Plan, and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included.
In the event of any conflict between the provisions of the Plan and the
terms of any contract or policy issued hereunder, the provisions of the Plan
control the operation and administration of the Plan.
SECTION 9.10--LEGAL ACTIONS.
The Plan, the Plan Administrator, the Trustee and the Named Fiduciary
are the necessary parties to any action or proceeding involving the assets held
with respect to the Plan or administration of the Plan or Trust. No person
employed by the Employer, no Participant, former Participant or their
Beneficiaries or any other person having or claiming to have an interest in the
Plan is entitled to any notice of process. A final judgment entered in any such
action or proceeding shall be binding and conclusive on all persons having or
claiming to have an interest in the Plan.
SECTION 9.11--SMALL AMOUNTS.
If the Vested Account of a Participant has never exceeded $3,500, the
entire Vested Account shall be payable in a single sum as of the earliest of his
Retirement Date, the date he dies, or the date he ceases to be an Employee for
any other reason. This is a small amounts payment. If a small amount is payable
as of the date the Participant dies, the small amounts payment shall be made to
the Participant's Beneficiary (spouse if the death benefit is payable to the
spouse). If a small amounts payment is payable while the Participant is living,
the small amounts payment shall be made to the Participant. The small amounts
payment is in full settlement of all benefits otherwise payable.
No other small amounts payments shall be made.
SECTION 9.12--WORD USAGE.
The masculine gender. where used in this Plan, shall include the
feminine gender and the singular words as used in this Plan may include the
plural, unless the context indicates otherwise.
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SECTION 9.13--TRANSFERS BETWEEN PLANS.
If an Employee previously participated in another plan of the Employer
which credited service under the elapsed time method for any purpose which under
this Plan is determined using the hours method then the Employee's service shall
be equal to the sum of (a). (b) and (c) below
a) The number of whole years of service credited to him under the
other plan as of the date he became an Eligible Employee under
this Plan.
b) One year or a part of a year of service for the applicable
service period in which he became an Eligible Employee if he is
credited with the required number of Hours-of-Service. If the
Employer does not have sufficient records to determine the
Employee's actual Hours-of-Service in that part of the service
period before the date he became an Eligible Employee the
Hours-of-Service shall be determined using an equivalency. For
any month in which he would be required to be credited with one
Hour-of-Service the Employee shall be deemed for purposes of this
section to be credited with 190 Hours-of-Service.
c) The Employee's service determined under this Plan using the hours
method after the end of the applicable service period in which he
became an Eligible Employee.
If an Employee previously participated in another plan of the Employer
which credited service under the hours method for any purpose which under this
Plan is determined using the elapsed time method then the Employee's service
shall be equal to the sum of (d) (e) and (f) below:
d) The number of whole years of service credited to him under the
other plan as of the beginning of the applicable service period
under that plan in which he became an Eligible Employee under
this Plan.
e) The greater of (1) the service that would be credited to him for
that entire service period using the elapsed time method or (2)
the service credited to him under the other plan as of the date
he became an Eligible Employee under this Plan.
f) The Employee's service determined under this Plan using the
elapsed time method after the end of the applicable service
period under the other plan in which he became an Eligible
Employee.
Any modification of service contained in this Plan shall be applicable
to the service determined pursuant to this section.
If the Employee previously participated in the plan of a Controlled
Group member which credited service under a different method than is used in
this Plan for purposes of determining
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eligibility and vesting the provisions above shall apply as though the plan of
the Controlled Group member were a plan of the Employer.
SECTION 9.14--QUALIFICATION OF PLAN.
The Employer intends to apply for an advance determination letter from
the Internal Revenue Service for the initial qualification of the Plan and the
determination of exempt status of the Trust.
If this Plan is denied initial qualification it will terminate. The
Employer shall give written notice to the Trustee of the denial in sufficient
time so the assets resulting from Contributions which were conditioned on
initial qualification of the Plan may be returned within one year after the date
of denial. but only if the application for the qualification is made by the time
prescribed by law for filing the Employer's return for the taxable year in which
the Plan is adopted or such later date as the Secretary of the Treasury may
prescribe. The Trustee shall notify the Insurer that the Group Contract is to be
terminated and any Insurance Policy surrendered. The Plan assets which result
from Employer Contributions and Participant Contributions shall be returned to
the Employer and Participants respectively. The Trustee, the Plan Administrator
and the Named Fiduciary shall then be discharged from all obligations under the
Plan and the Insurer shall be discharged from all obligations under the Group
Contract and any Insurance Policy. A Participant or Beneficiary shall not have
any right or claim to the assets or to any benefit under this Plan before the
Internal Revenue Service determines that the Plan and Trust qualify under the
provisions of Code Section 401(a).
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ARTICLE X
TOP-HEAVY PLAN REQUIREMENTS
SECTION 10.01--APPLICATION.
The provisions of this article shall supersede all other provisions in
the Plan to the contrary.
For the purpose of applying the Top-heavy Plan requirements of this
article all members of the Controlled Group shall be treated as one Employer.
The term Employer as used in this article shall be deemed to include all members
of the Controlled Group unless the term as used clearly indicates only the
Employer is meant.
The accrued benefit or account of a participant which results from
deducible voluntary contributions shall not be included for any purpose under
this article.
The minimum vesting and contribution provisions of the MODIFICATION OF
VESTING REQUIREMENTS and MODIFICATION OF CONTRIBUTIONS SECTIONS of Article X
shall not apply to any Employee who is included in a group of Employees covered
by a collective bargaining agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or more
employers including the Employer if there is evidence that retirement benefits
were the subject of good faith bargaining between such representatives. For this
purpose the term "employee representatives" does not include any organization
more shall half of whose members are employees who are owners officers or
executives.
SECTION 10.02--DEFINITIONS.
The following terms are defined for purposes of this article.
AGGREGATION GROUP means
a) each of the Employer's retirement plans in which a Key Employee
is a participant during the Year containing the Determination
Date or one of the four preceding Years.
b) each of the Employer's other retirement plans which allows the
plan(s) described in (a) above to meet the nondiscrimination
requirement of Code Section 401(a)(4) or the minimum coverage
requirement of Code Section 410, and
c) any of the Employer's other retirement plans not included in (a)
or (b) above which the Employer desires to include as part of the
Aggregation Group. Such a retirement plan shall be included only
if the Aggregation Group would continue to satisfy the
requirements of Code Section 401(a)(4) and Code Section 410.
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The plans in (a) and (b) above constitute the "required" Aggregation
Group. The plans in (a) (b) and (c) above constitute the "permissive"
Aggregation Group.
COMPENSATION means as to an Employee, for any period, compensation as
defined in the CONTRIBUTION LIMITATION SECTION of Article III. For purposes of
determining who is a Key Employee Compensation shall include in addition to
compensation as defined in the CONTRIBUTION LIMITATION SECTION of Article III
elective contributions. Elective contributions are amounts which are excludable
from the Employee's gross income under Code Sections 125, 402(e)(3), 402(h) or
403(b) and contributed by the Employer at the Employee's election to a Code
Section 401(k) arrangement, a simplified employee pension, cafeteria plan or
tax-sheltered annuity.
For purposes of Compensation as defined in this section, Compensation
shall be limited in the same manner and in the same time as the Compensation
defined in the DEFINITION SECTION of Article 1.
DETERMINATION DATE means as to this Plan for any Year, the last day of
the preceding Year. However, if there is no preceding Year, the Determination
Date is the last day of such Year.
KEY EMPLOYEE means any Employee or former Employee (including
Beneficiaries of deceased Employees) who at any time during the determination
period was
a) one of the Employer's officers (subject to the maximum below)
whose Compensation (as defined in this section) for the Year
exceeds 50 percent of the dollar limitation under Code Section
415 (b)( 1 )(A).
b) one of the ten Employees who owns (or is considered to own, under
Code Section 318) more than a half percent ownership interest and
one of the largest interests in the Employer during any Year of
the determination period if such persons Compensation (as defined
in this section) for the Year exceeds the dollar limitation under
Code Section 415 (c)( 1 )(A)
c) a five-percent owner of the Employer, or
d) a one-percent owner of the Employer whose Compensation (as
defined in this section) for the Year is more than $150,000.
Each member of the Controlled Group shall be treated as a separate
employer for purposes of determining ownership in the Employer.
The determination period is the Year containing the Determination Date
and the four preceding Years. If the Employer has fewer than 30 Employees, no
more than three Employees shall be treated as Key Employees because they are
officers. If the Employer has between 30 and 500 Employees, no more than ten
percent of the Employer's Employees (if not an integer,
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increased to the next integer) shall be treated as Key Employees because they
are officers. In no event will more than 50 Employees be treated as Key
Employees because they arc officers if the Employer has 500 or more Employees.
The number of Employees for any Plan Year is the greatest number of Employees
during the determination period. Officers who are employees described in Code
Section 414(q)(8) shall be excluded. If the Employer has more than the maximum
number of officers to be treated as Key Employees, the officers shall be ranked
by amount of annual Compensation (as defined in this section), and those with
the greater amount of annual Compensation during the determination period shall
be treated as Key Employees. To determine the ten Employees owning the largest
interests in the Employer, if more than one Employee has the same ownership
interest the Employee(s) having the greater annual Compensation shall be treated
as owning the larger interest(s). The determination of who is a Key Employee
shall be made according to Code Section 416 (i) ( 1 ) and the regulations
thereunder.
NON-KEY EMPLOYEE means a person who is a non-key employee within the
meaning of Code Section 416 and regulations thereunder.
PRESENT VALUE means the present value of a participant's accrued
benefit under a defined benefit plan as of his normal retirement age (attained
age if later) or, if the plan provides non-proportional subsidies, the age at
which the benefit is most valuable. The accrued benefit of any Employee (other
than a Key Employee) shall be determined under the method which is used for
accrual purposes for all plans of the Employer or if there is no one method
which is used for accrual purposes for all plans of the Employer, as if such
benefit accrued not more rapidly than the slowest accrual rate permitted under
Code Section 411(b)(1)(C). For purposes of establishing Present Value, any
benefit shall be discounted only for 7.5% interest and mortality according to
the 1971 Group Annuity Table (Male) without the 7% margin but with projection by
Scale E from 1971 to the later of (a) 1974, or (b) the year determined by adding
the age to 1920, and wherein for females the male age six years younger is used.
If the Present Value of accrued benefits is determined for a participant under
more than one defined benefit plan included in the Aggregation Group, all such
plans shall use the same actuarial assumptions to determine the Present Value.
TOP-HEAVY PLAN means a plan which is a top-heavy plan for any plan year
beginning after December 31, 1983. This Plan shall be a Top-heavy Plan if
a) the Top-heavy Ratio for this Plan alone exceeds 60 percent and
this Plan is not part of any required Aggregation Group or
permissive Aggregation Group.
b) this Plan is a part of a required Aggregation Group, but not part
of a permissive Aggregation Group, and the Top-heavy Ratio for
the required Aggregation Group exceeds 60 percent.
c) this Plan is a part of a required Aggregation Group and part of a
permissive Aggregation Group and the Top-heavy Ratio for the
permissive Aggregation Group exceeds 60 percent.
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TOP-HEAVY RATIO means the ratio calculated below for this Plan or for
the Aggregation Group.
a) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer
has not maintained any defined benefit plan which during the
five-year period ending on the determination date has or has had
accrued benefits, the Top-heavy Ratio for this Plan alone or for
the required or permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of the account
balances of all Key Employees as of the determination date and
the denominator of which is the sum of all account balances of
all employees as of the determination date. Both the numerator
and denominator of the Top-heavy Ratio are adjusted for any
distribution of an account balance (including those made from
terminated plan(s) of the Employer which would have been part of
the required Aggregation Group had such plan(s) not been
terminated) made in the five-year period ending on the
determination date. Both the numerator and denominator of the
Top-heavy Ratio are increased to reflect any contribution not
actually made as of the Determination Date, but which is required
to be taken into account on that date under Code Section 416 and
the regulations thereunder.
b) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer
maintains or has maintained one or more defined benefit plans
which during the five-year period ending on the determination
date has or has had accrued benefits the Top-heavy Ratio for any
required or permissive Aggregation Group as appropriate is a
fraction the numerator of which is the sum of the account
balances under the defined contribution plan(s) of all Key
Employees and the Present Value of accrued benefits under the
defined benefit plan(s) for all Key Employees and the denominator
of which is the sum of the account balances under the defined
contribution plan(s) for all employees and the Present Value of
accrued benefits under the defined benefit plans for all
employees. Both the numerator and denominator of the Top-heavy
Ratio are adjusted for any distribution of an account balance or
an accrued benefit (including those made from terminated plan(s)
of the Employer which would have been part of the required
Aggregation Group had such plan(s) not been terminated) made in
the five-year period ending on the determination date.
c) For purposes of (a) and (b) above the value of account balances
and the Present Value of accrued benefits will be determined as
of the most recent valuation date that falls within or ends with
the 12-month period ending on the determination date except as
provided in Code Section 416 and the regulations thereunder for
the first and second plan years of a defined benefit plan. The
account balances and accrued benefits of an employee who is not a
Key Employee but who was a Key Employee in a prior year will be
disregarded. The calculation of the Top-heavy
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Ratio and the extent to which distributions rollovers and
transfers during the five-year period ending on the determination
date are to be taken into account, shall be determined according
to the provisions of Code Section 416 and regulations thereunder.
The account balances and accrued benefits of an individual who
has performed no service for the Employer during the five-year
period ending on the determination date shall be excluded from
the Top-heavy Ratio until the time the individual again performs
service for the Employer. Deductible employee contributions will
not be taken into account for purposes of computing the Top-heavy
Ratio. When aggregating plans the value of account balances and
accrued benefits will be calculated with reference to the
determination dates that fall within the same calendar year.
Account as used in this definition means the value of an employee's
account under one of the Employer the retirement plans on the latest valuation
date. In the case of a money purchase plan or target benefit plan such value
shall be adjusted to include any contributions made for or by the employee after
the valuation date and on or before such determination date or due to be made as
of such determination date but not yet forwarded to the insurer or trustee. In
the case of a profit sharing plan such value shall be adjusted to include any
contributions made for or by the employee after the valuation date and on or
before such determination date. During the first Year of any profit sharing plan
such adjustment in value shall include contributions made after such
determination date that are allocated as of a date in such Year. The
nondeductible employee contributions which an employee makes under a defined
benefit plan of the Employer shall be treated as if they were contributions
under a separate defined contribution plan.
VALUATION DATE means. as to this Plan the last day of the last calendar
month ending in a Year.
YEAR means the Plan Year unless another year is specified by the
Employer in a separate written resolution in accordance with regulations issued
by the Secretary of the Treasury or his delegate.
SECTION 10.03--MODIFICATION OF VESTING REQUIREMENTS.
If a Participant's Vesting Percentage determined under Article I is not
at least as great as his Vesting Percentage would be if it were determined under
a schedule permitted in Code Section 416 the following shall apply. During any
Year in which the Plan is a Top-heavy Plan the Participant's Vesting Percentage
shall be the greater of the Vesting Percentage determined under Article I or the
schedule below.
VESTING SERVICE NONFORFEITABLE
(whole years) PERCENTAGE
Less than 2 0
2 20
3 40
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4 60
5 80
6 or more 100
The schedule above shall not apply to Participants who are not credited
with an Hour-of-Service after the Plan first becomes a Top-heavy Plan. The
Vesting Percentage determined above applies to all of the Participant's Account
resulting from Employer Contributions including Contributions the Employer makes
before the TEFRA Compliance Date or when the Plan is not a Top-heavy Plan.
If in a later Year. this Plan is not a Top-heavy Plan a Participant's
Vesting Percentage shall be determined under Article I. A Participant's Vesting
Percentage determined under either Article I or the schedule above shall never
be reduced and the election procedures of the AMENDMENTS SECTION of Article IX
shall apply when changing to or from the schedule as though the automatic change
were the result of an amendment.
The part of the Participant's Vested Account resulting from the minimum
contributions required pursuant to the MODIFICATION OF CONTRIBUTIONS SECTION of
Article X shall not be forfeited because of a period of reemployment after
benefit payments have begun.
SECTION 10.04--MODIFICATION OF CONTRIBUTIONS.
During any Year in which this Plan is a Top-heavy Plan the Employer
shall make a minimum contribution or allocation on the last day of the Year for
each person who is a Non-Key Employee on that day and who either was or could
have been an Active Participant during the Year. A Non-Key Employee is not
required to have a minimum number of hours-of-service or minimum amount of
Compensation or to have had any Elective Deferral Contributions made for him in
order to be entitled to this minimum. The minimum contribution or allocation for
such person shall be equal to the lesser of (a) or (b) below.
a) Three percent of such person's Compensation (as defined in this
article).
b) The "highest percentage" of Compensation (as defined in this
article) for such Year at which the Employer's contributions are
made for or allocated to any Key Employee. The highest percentage
shall be determined by dividing the Employer Contributions made
for or allocated to each Key Employee during such Year by the
amount of his Compensation (as defined in this article) which is
not more than the maximum set out above and selecting the
greatest quotient (expressed as a percentage). To determine the
highest percentage all of the Employer's defined contribution
plans within the Aggregation Group shall be treated as one plan.
The provisions of this paragraph shall not apply if this Plan and
a defined benefit plan of the Employer are required to be
included in the Aggregation Group and this Plan enables the
defined benefit plan to meet the requirements of Code Section 401
(a)(4) or Code Section 410
101
<PAGE>
If the Employer's contributions and allocations otherwise required
under the defined contribution plan(s) are at least equal to the minimum above,
no additional contribution or reallocation shall be required. If the Employer's
contributions and allocations are less than the minimum above and Employer
Contributions under this Plan are allocated to Participants. any Employer
Contributions (other than those which are allocated on the basis of the amount
made for such person) shall be reallocated to provide the minimum. The remaining
Contributions shall be allocated as provided in the preceding articles of this
Plan taking into account any amount which was reallocated to provide the
minimum. If the Employer's total contributions and allocations are less than the
minimum above after any reallocation provided above, the Employer shall
contribute the difference for the Year.
The minimum contribution or allocation applies to all of the Employer's
defined contribution plans in the aggregate which are Top-Heavy Plans. If an
additional contribution or allocation is required to meet the minimum above, it
shall be provided in this Plan.
A minimum allocation under a profit sharing plan shall be made without
regard to whether or not the Employer has profits.
If a person who is otherwise entitled to a minimum contribution or
allocation above is also covered under a defined benefit plan of tile Employer's
which is a Top-Heavy Plan during that same Year, the minimum benefits for him
shall not be duplicated. The defined benefit plan shall provide an annual
benefit for him on, or adjusted to, a straight life basis of tile lesser of (c)
two percent of his average pay multiplied by his years of service or (d) twenty
percent of his average pay. Average pay and years of service shall have the
meaning set forth in such defined benefit plan for this purpose.
For purposes of this section, any employer contribution made according
to a salary reduction or similar arrangement shall not apply before the first
Yearly Date in 1985. On and after the first Yearly Date in 1989, any such
employer contributions and employer contributions which are matching
contributions, as defined in Code Section 401(m), shall not apply in determining
if the minimum contribution requirement has been met, but shall apply in
determining the minimum contribution required. Forfeitures credited to a
Participant's Account are treated as employer contributions.
The requirements of this section shall be met without regard to
contributions under Chapter 2 of the Code (relating to tax on self-employment).
Chapter 21 of the Code (relating to Federal Insurance Contributions Act), Title
II of the Social Security Act or any other Federal or state law.
SECTION 10.05--MODIFICATION OF CONTRIBUTION LIMITATION.
If the provisions of subsection (e) of the CONTRIBUTION LIMITATION
SECTION of Article III are applicable for any Limitation Year during which this
Plan is a Top-Heavy Plan, the benefit limitations shall be modified. The
definitions of Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction in the CONTRIBUTION LIMITATION SECTION of
102
<PAGE>
Article III shall be modified by substituting "1.0" in lieu of "1.25." The
optional denominator for determining the Defined Contribution Plan Fraction
shall be modified by substituting "$41,500" in lieu of "$51,875." In addition,
an adjustment shall be made to the numerator of the Defined Contribution Plan
Fraction. The adjustment is a reduction of that numerator similar to the
modification of the Defined Contribution Plan Fraction described in the
CONTRIBUTION LIMITATION SECTION of Article III, and shall be made with respect
to tile last Plan Year beginning before January 1, 1984.
The modifications in the paragraph above shall not apply with respect
to a Participant so long as employer contributions, forfeitures employee
contributions are not credited to his account under this or any of the
Employer's other defiend contribution plans and benefits do not accrue for such
Participant under the Employer's defined benefit plan(s), until the sum of his
Defined Contribution and Defined Benefit Plan Fractions is less than 1.0.
103
<PAGE>
EXHIBIT
ALTAIR SAVING PLAN SPECIAL MERGER PROVISION
MERGER AND ACCOUNT BALANCES '
Effective as of January 1, 1997, the assets of the Altair Savings Plan
("Merged Plan") will be transferred in kind and merged into this Plan
("Surviving Plan"). The value of the account of each participant in the Merged
Plan shall be determined as of the December 31, 1996 valuation date of the
Merged Plan. the balance in the various accounts of the Merged Plan shall be
transferred to the trust of the Surviving Plan as of that date, shall constitute
a balance in either Participant's Elective Deferral Contributions Accounts, the
Voluntary Contributions Accounts, or the Rollover Contributions Accounts of the
Surviving Plan, as applicable, and shall thereafter be subject to all provisions
of the Surviving Plan relating to such Accounts under the Surviving Plan, except
that each participant shall be fully Vested in the full amount of the balance
transferred from the Merged Plan to the Surviving Plan.
As of February 4,1997, the assets of the Merged Plan shall continue to
be invested in the Investment Funds under the Surviving Plan in accordance with
the directions of the Participants in the Merged Plan.
Effective February 4,1997, Participants shall have the right to
redirect how their account balances in the Surviving Plan are invested.
104
<PAGE>
ARIZONA WELDING EQUIPMENT CO. 401 (K) PLAN
SPECIAL MERGER PROVISION
MERGER AND ACCOUNT BALANCES
Effective as of January 1, 1997, the assets of the Arizona Welding
Equipment Co. 401(k) Plan ("Merged Plan") will be transferred in kind and merged
into this Plan ("Surviving Plan"). The value of the account of each Participant
in the Merged Plan shall be determined as of the December 31, 1996 valuation
date of the Merged Plan. The balance in the various accounts of the Merged Plan
shall be transferred to the trust of the Surviving Plan as of that date, shall
constitute a balance in either the Participant's Elective Deferral Contributions
Accounts, the Voluntary Contributions Accounts, Matching Contributions Accounts,
or the Rollover Contributions Accounts of the Surviving Plan, as applicable, and
shall thereafter be subject to all provisions of the Surviving Plan relating to
such Accounts under the Surviving Plan, except that each Participant shall be
fully Vested in the full amount of the balance transferred from the Merged Plan
to the Surviving Plan.
Until May 1, 1997, or if later the date on which it is administratively
feasible for Participants to direct how their account balances in the Surviving
Plan are invested, the assets of the Merged Plan shall continue to be invested
as directed by the Trustee or other applicable ERISA fiduciary. Effective May 1,
1997, or as soon thereafter as administratively feasible, Participant shall have
the right to direct how their account balances in the Surviving Plan are
invested.
105
<PAGE>
PARRY CORPORATION SECOND AMENDED AND RESTATED PROFIT SHARING
PLAN AND TRUST SPECIAL MERGER PROVISION
MERGER AND ACCOUNT BALANCES
Effective as of July 15, 1997, the assets of the Parry Corporation
Second Amended and Restated Profit Sharing Plan and Trust ["Merged Plan") will
be transferred in cash or in kind and merged into this Plan ("Surviving Plan").
The value of the account of each Participant in the Merged Plan shall be
determined as of the July 15, 1997 valuation date of the Merged Plan. The
balance in the various accounts of the Merged Plan shall be transferred to the
trust of the Surviving Plan as of that date, shall constitute a balance in
either the Participant's Elective Deferral Contributions Accounts, the Voluntary
Contributions Accounts, Matching Contributions Accounts, Other Employer
Contributions Accounts, or the Rollover Contributions Accounts of the Surviving
Plan, as applicable, and shall thereafter be subject to all provisions of the
Surviving Plan relating to such Accounts under the Surviving Plan, except that
each Participant shall be fully Vested in the full amount of the balance
transferred from the Merged Plan to the Surviving Plan
Until July 15, 1997, or if later the date on which it is
administratively feasible for Participants to direct how their account balances
in the Surviving Plan are invested, the assets of the Merged Plan shall continue
to be invested as directed by the Trustee or other applicable ERISA fiduciary.
Effective July 15, 1997, or as soon thereafter as administratively feasible,
Participants shall have the right to direct how their account balances in the
Surviving Plan are invested .
106
<PAGE>
VALLEY WELDING SUPPLY CO. PROFIT SHARING AND SAVINGS PLAN
SPECIAL MERGER PROVISION
MERGER AND ACCOUNT BALANCES
Effective as of December 31, 1997, the assets of the Valley Welding
Supply Co. Profit Sharing and Savings Plan ("Merged Plan") will be transferred
in cash or in kind and merged into this Plan ("Surviving Plan"). The value of
the account of each Participant in the Merged Plan shall be determined as of the
December 31, 1997 valuation date of the Merged Plan. The balance in the various
accounts of the Merged Plan shall be transferred to the trust of the Surviving
Plan as of that date, shall constitute a balance in either the Participant's
Elective Deferral Contributions Accounts, the Voluntary Contributions Accounts,
Matching Contributions Accounts, Other Employer Contributions Accounts, or the
Rollover Contributions Accounts of the Surviving Plan, as applicable, and shall
thereafter be subject to all provisions of the Surviving Plan relating to such
Accounts under the Surviving Plan, except that each Participant shall be fully
Vested in the full amount of the balance transferred from the Merged Plan to the
Surviving Plan.
Until January 1, 1998, or if later the date on which it is
administratively feasible for Participants to direct how their account balances
in the Surviving Plan are invested, the assets of the Merged Plan shall continue
to be invested as directed by the Trustee or other applicable ERISA fiduciary.
Effective January 1, 1998, or as soon thereafter as administratively feasible,
Participants shall have the right to direct how their account balances in the
Surviving Plan are invested.
107
<PAGE>
CBI 401 (K) PAY DEFERRAL PLAN SPECIAL TRANSFER PROVISION
TRANSFER AND ACCOUNT BALANCES
Effective as of January 1, 1997, the assets of the CBI 401(K) Pay
Deferral Plan ("Transfer Plan") for employees of Liquid Carbonic Industries,
Inc. ("Liquid") or its subsidiaries and affiliates who have transferred
employment from Liquid or any of its subsidiaries or affiliates to a Primary
Employer or an Adopting Employer will be transferred in cash into this Plan
("Surviving Plan"). The value of the account of each Participant in the Transfer
Plan shall be determined as of the December 31, 1996 valuation date of the
Transfer Plan. The balance in the various accounts of the Transfer Plan shall be
transferred to the trust of the Surviving Plan as of that date, shall constitute
a balance in either the Participant's Elective Deferral Contributions Accounts,
Transfer ESOP Contributions Accounts, or the Rollover Contributions Accounts of
the Surviving Plan, as applicable, and shall thereafter be subject to all
provisions of the Surviving Plan relating to such Accounts under the Surviving
Plan, except that each Participant shall be fully Vested in the full amount of
the balance transferred from the Transfer Plan to the Surviving Plan.
Until January 6, 1997, or if later the date on which it is
administratively feasible for Participants to direct how their account balances
in the Surviving Plan are invested, the assets of the Transfer Plan shall
continue to be invested as directed by the Trustee or other applicable ERISA
fiduciary. Effective January 6, 1997, or as soon thereafter as administratively
feasible, Participants shall have the right to direct how their account balances
in the Surviving Plan are invested
108
<PAGE>
By executing this Plan, the Primary Employer acknowledges having
counseled to the extent necessary with selected legal and tax advisors regarding
She Plan s legal and tax implications.
Executed this 30th day of December, 1994/
GENEX, LTD.
/s/
By:_________________________________
_________________________________
Title
The Adopting Employer must agree to participate in or adopt the Plan in
writing. If this has not already been done, it may be done by signing below.
GENESIS, LTD. i
/s/
By:_________________________________
_________________________________
Title
12/30/94
_________________________________
Date
109
<PAGE>
AMENDMENT NO. 1
GENEX, LTD. EMPLOYEES' PROFIT SHARING 401(K) PLAN
The Plan named above gives the Employer the right to amend it at any
time. According to that right, the Plan is amended as provided below:
Effective January 1, 1994
by striking the following:
Page 1
Page 5
Page 20
Page 21
and substituting the following:
Page 1
Page 5
Page 20
Page 21
The provisions and conditions set forth on any page of this amendment
are a part of the Plan as fully as if recited over the signature(s) below.
By signing this amendment, the Employer acknowledges having counseled to
the extent necessary with selected legal and tax advisors regarding the
amendment's legal and tax implications.
Signed this ______ day of _______________, 19___/
GENEX, LTD.
/s/
By:_________________________________
_________________________________
Title
110
<PAGE>
AMENDMENT NO. 2
GENEX, LTD. EMPLOYEES' PROFIT SHARING 401(K) PLAN
The Plan named above gives the Employer the right to amend it at any
time. According to that right, the Plan is amended as provided below:
Effective January 1, 1993,
by striking the following:
Page 48
and substituting the following:
Page 48
The provisions and conditions set forth on any page of this amendment
are a part of the Plan as fully as if recited over the signature(s) below.
By signing this amendment, the Employer acknowledges having counseled to
the extent necessary with selected legal and tax advisors regarding the
amendment's legal and tax implications.
Signed this ______ day of _______________, 19___/
GENEX, LTD.
By:_________________________________
_________________________________
Title
111
<PAGE>
AMENDMENT NO. 3
GENEX, LTD. EMPLOYEES' PROFIT SPARING 401(K) PLAN
The Plan named above gives the Employer the right to amend it at any.
time. According to that right, the Plan is amended as provided below:
Effective July 1, 1996,
by striking the following.
Title Page Page 15
Page 1 Page 19
Page 3 Page 22
Page 5 Page 23
Page 7 Page 26
Page 8 Page 46
Page 9 Page 48
and substituting the following
Title Page Page 19
Page 1 Page 19a
Page 3 Page 22
Page 5 Page 23
Page 7 Page 23a
Page 8 Page 26
Page 9 Page 46
Page 15 Page 48
The provisions and conditions set forth on any page of this amendment
part of the Plan as fully as if recited over the signature(s) below.
By signing this amendment, the Employee acknowledges having counseled
to the extent necessary with selected legal and tax advisors regarding the
amendment's legal and tax implications.
Signed this _____ day of _________________, 19___.
GENEX, LTD. PRAXAIR DISTRIBUTION, INC.
/s/ /s/
By_________________________________ By_________________________________
DIVISION HUMAN RESOURCE MGR. DIVISION HUMAN RESOURCE MGR.
---------------------------- ----------------------------
Title Title
112
<PAGE>
AMENDMENT NO. 4
PRAXAIR DISTRIBUTION. INC. 401 (K) RETIREMENT PLAN
The Plan named above gives the Employer the right to amend it at any
time. According to that right, the Plan is amended as provided below:
Effective January 1, 1997,
by striking the following:
Page 1 Page 19a
Page 2 Page 22
Page 3 Page 23
Page 4 Page 24
Page 8 Page 26
Page 9 Page 27
Page 13 Page 42
Page 15 Page 46
Page 16 Page 56
Page 18 Page 62
Page 19 Page 77a
and substituting the following:
Page 1 Page 22a
Page 2 Page 23
Page 3 Page 24
Page 4 Page 26
Page 4a Page 27
Page 8 Page 42
Page 8a Page 42a
Page 9 Page 42b
Page 13 Page 46
Page 15 Page 56
Page 15a Page 62
Page 16 Page 62a
Page 18 Page 77a
Page 19 Page 77b
Page 19a Page 77c
Page 19b Page 77d
Page 22 Page 77e
Effective July 1, 1997, by striking page 19 and substituting page 19.
113
<PAGE>
Effective August 1, 1997, by striking pages 14, 64, 65 and substituting
pages 14, 64, 64a, 64b, 64c, 64d, 65, 65a.
The provisions and conditions set forth on any page of this amendment
are a part of the Plan as fully as if recited over the signature(s) below.
By signing this amendment, the Employer acknowledges having counseled
to the extent necessary with selected legal and tax advisors regarding the
amendment s legal and tax implications.
Signed this ______ day of _______________, 19___/
PRAXAIR DISTRIBUTION, INC..
/s/
By:_________________________________
_________________________________
Title
The Adopting Employer must agree to participate in or adopt this Plan
in writing. If this has not already been done, it may be done by signing below.
Signed this ______ day of _______________, 19___/
WESTAIR CRYOGENICS CO..
/s/
By:_________________________________
_________________________________
Title
JACKSONVILLE WELDING SUPPLY, INC.
/s/
By:_________________________________
_________________________________
Title
114
EXHIBIT 5
<PAGE>
EXHIBIT 5
August 14, 1997
Board of Directors
Praxair, Inc.
39 Old Ridgebury Road
Danbury, CT 06817-5113
Re: Registration Statement on Form S-8 for Praxair Distribution, Inc.
401 (K) RETIREMENT PLAN
----------------------------------------------------------------------
Dear Sirs/Madame:
We are acting as counsel to Praxair, Inc., a Delaware corporation
("Corporation") in connection with the preparation and filing of a Registration
Statement on Form S-8 (the "Registration Statement") under the Securities Act of
1933, as amended, ("Act") with the Securities and Exchange Commission
("Commission") relating to 100,000 shares of the Corporation's common stock,
$.01 par value per share ("Common Stock") offered for sale in connection with
the Praxair Distribution, Inc. 401 (k) Retirement Plan ("Plan").
In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
such documents, corporate records, certificates of public officials and officers
of the Corporation and Praxair Distribution, Inc. ("Subsidiary") and such other
instruments as we have deemed necessary or appropriate as a basis for the
opinions expressed below.
For purposes of this opinion we have assumed the authenticity of all
documents submitted to us as originals, the conformity to originals of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of all documents submitted to us as copies. We
have also assumed the legal capacity of all natural persons, the genuineness of
all signatures on all documents examined by us, the authority of such persons
signing on behalf of the parties thereto other than the Corporation and the
Subsidiary and the due authorization, execution and delivery of all documents by
the parties thereto other than the Corporation and the Subsidiary. As to certain
factual matters material to the opinion expressed herein, we have relied
<PAGE>
Board of Directors -2- August 14, 1997
to the extent we deemed proper upon representations, warranties and statements
as to matters of officers and other representatives of the Corporation and the
Subsidiary. Our opinion expressed below is subject to the qualification that we
express no opinion as to any law other than the General Corporation Law of the
State of Delaware and the federal laws of the United States of America. Without
limiting the foregoing, we express no opinion with respect to the applicability
thereto or effect of municipal laws or the rules, regulations or orders of any
municipal agencies within any such state.
Based upon the foregoing, we are of the opinion that:
1. The Corporation has been duly organized and is validly existing under
the laws of the State of Delaware.
2. The Subsidiary has been duly organized and is validly existing under the
laws of the State of Delaware.
3. The Plan has been duly adopted by the Board of Directors of the
Subsidiary.
4. The shares of Common Stock of the Corporation to which the Registration
Statement relates have been duly authorized and reserved for issuance pursuant
to the Plan and, when issued and sold pursuant to the Plan, will be legally
issued, fully paid and non-assessable.
This opinion is limited to the specific issues addressed herein, and no
opinion may be inferred or implied beyond that expressly stated herein. We
assume no obligation to revise or supplement this opinion should the present
General Corporation Law of the State of Delaware or the federal laws of the
United States of America be changed by legislative action, judicial decision or
otherwise.
We hereby consent to the filing of this letter as an Exhibit 5 to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act or
the rules and regulations of the Commission promulgated thereunder.
This opinion is furnished to you in connection with the filing of the
Registration Statement and is not to be used, circulated, quoted or otherwise
relied upon for any other purpose.
Very truly yours,
KELLEY DRYE & WARREN LLP
EXHIBIT 23.1
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 7, 1997, which appears on
page 43 of the 1996 Annual Report to Shareholders of Praxair, Inc., which is
incorporated by reference in Praxair, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1996.
PRICE WATERHOUSE LLP
Stamford, Connecticut
August 11, 1997
