As filed with the Securities and Exchange Commission on October 20,
1995
Registration
No. 33-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------------------
ARKANSAS BEST CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 71-0673405
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 SOUTH 21ST STREET
FORT SMITH, ARKANSAS 72901
(Address of principal executive offices) (Zip Code)
1) CAROLINA FREIGHT CORPORATION
EMPLOYEE SAVINGS AND PROTECTION PLAN
2) COMPLETE LEASING CONCEPTS, INC. EMPLOYEE SAVINGS & PROFIT SHARING PLAN
3) IDI 401(K) SAVINGS PLAN
(Full title of the plans)
----------------------------------
RICHARD F. COOPER COPY TO:
SECRETARY MARK D. WIGDER, ESQ.
ARKANSAS BEST CORPORATION JENKENS & GILCHRIST,
1000 SOUTH 21ST STREET A PROFESSIONAL
CORPORATION
FORT SMITH, ARKANSAS 72901 1445 ROSS AVENUE, SUITE
3200
(501) 785-6000 DALLAS, TEXAS 75202
(Name, address and telephone number (214) 855-4500
including area code of agent for service)
----------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
Title of Class of TO BE OFFERING PRICE AGGREGATE REGISTRATION FEE(3)
Securities to be Registered REGISTERED(1) PER SHARE(2)(3) OFFERING PRICE(2)(3)
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value per 600,000 Shares $ 9 3/8 $ 5,625,000 $ 1,939.66
share
</TABLE>
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, as
amended, this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the Carolina Freight Corporation
Employee Savings and Protection Plan, the Complete Leasing Concepts, Inc.
Employee Savings and Profit Sharing Plan, and the IDI 401(k) Savings Plan (the
"Plans").
(2) Estimated solely for the purpose of calculating the registration
fee.
(3) Calculated pursuant to Rule 457(c) and (h) under the Securities
Act of 1933, as amended. Accordingly, the price per share of the common stock
offered hereunder pursuant to the Plans is based on 600,000 shares of common
stock that may be offered or sold under the Plans at a price per share of
$9 3/8 which was the closing price per share of common stock on the NASDAQ
National Market on October 17, 1995.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The registrant and the Plans hereby incorporate by reference in this
registration statement the following documents previously filed by the
registrant with the Securities and Exchange Commission (the "Commission"):
(1) the registrant's Annual Report on Form 10-K filed with the
Commission for the fiscal year ended December 31, 1994;
(2) the registrant's Quarterly Reports on Form 10-Q for the
quarters ended March 31 and June 30 1995, filed with the Commission;
(3) the registrant's Current Report on Form 8-K dated August 17,
1995, and the amendment to such Report on Form 8-K/A dated October 13,
1995;
(4) the description of the common stock, par value $0.01 per
share, of the registrant (the "Common Stock") set forth in the
Registration Statement on Form 8-A, filed with the Commission on March
20, 1992, as amended by Form 8, dated April 23, 1992 including any
amendment or report filed for the purpose of updating such description.
All documents filed by the registrant with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), subsequent to the date of this registration
statement shall be deemed to be incorporated herein by reference and to be a
part hereof from the date of the filing of such documents until such time as
there shall have been filed a post-effective amendment that indicates that all
securities offered hereby have been sold or that deregisters all securities
remaining unsold at the time of such amendment.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Registrant's Restated Certificate of Incorporation provides that no
director of the Registrant will be personally liable to the Registrant or any
of its stockholders for monetary damages arising from the director's breach of
fiduciary duty as a director, with certain limited exceptions.
Pursuant to the provisions of Section 145 of the Delaware General
Corporation Law, every Delaware corporation has the power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (other than an
action by or in the right of the corporation) by reason of the fact that he or
she is or was a director, officer, employee or agent of any corporation,
partnership, joint venture, trust or other enterprise, against any and all
expenses, judgments, fines and amounts paid in settlement and reasonably
incurred in connection with such action, suite or proceeding. The power to
indemnify applies only if such person acted in good faith and in a manner he
or she reasonably believed to be in the best interest, or not opposed to the
best interest, of the corporation and with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was
unlawful.
The power to indemnify applies to actions brought by or in the right of
the corporation as well, but only to the extent of defense and settlement
expenses and not to any satisfaction of a judgment or settlement of the claim
itself, and with the further limitation that in such actions no
indemnification shall be made in the event of any adjudication unless the
court, in its discretion, believes that in the light of all the circumstances
indemnification should apply.
To the extent any of the persons referred to in the two immediately
preceding paragraphs is successful in the defense of the actions referred to
therein, such person is entitled, pursuant to Section 145, to indemnification
as described above.
The Registrant has entered into indemnity agreements with each of its
directors. Each such Indemnification Agreement provides for indemnification
of directors of the Registrant to the fullest extent permitted by the Delaware
General Corporation Law and additionally permits advancing attorney's fees and
all other costs, expenses, obligations, fines and losses, paid or incurred by
a director generally in connection with the investigation, defense or other
participation in any threatened, pending or completed action, suit or
proceeding or any inquiry or investigation thereof, whether conducted by or on
behalf of the Registrant or any other party. If it is later determined that
the director is or was not entitled to indemnification under applicable law,
the Registrant is entitled to reimbursement by the director.
The Indemnification Agreements further provide that in the event of a
change in control of the Registrant, then with respect to all matters
thereafter arising concerning the rights of directors to indemnity payments
and expense advances, all determinations regarding excludable claims will be
made only by a court of competent jurisdiction or by special independent legal
counsel selected by the director and approved by the Registrant.
To the extent that the board of directors or the stockholders of the
Registrant may in the future wish to limit or repeal the ability of the
Registrant to indemnify directors, such repeal or limitation may not be
effective as to directors who are currently parties to the Indemnification
Agreements, because their rights to full protection are contractually assured
by the Indemnification Agreements. It is anticipated that similar contracts
may be entered into, from time to time, with future directors of the
Registrant.
In addition, the Registrant's Restated Certificate of Incorporation and
Amended and Restated Bylaws provide for indemnification of officers and
directors to the fullest extent permitted by the Delaware General Corporation
Law.
ITEM 8. EXHIBITS.
(a) Exhibits.
The following documents are filed as a part of this
registration statement.
EXHIBIT DESCRIPTION OF EXHIBIT
4.1 Restated Articles of Incorporation of Arkansas Best Corporation, as
amended (incorporated by reference to Exhibit 3.1 to the
registrant's Registration Statement on Form S-3 (Reg. No. 33-
46483))
4.2 Restated Bylaws of the Arkansas Best Corporation (incorporated by
reference to Exhibit 3.2 to the Registrant's Registration Statement
on Form S-3 (Reg. No. 33-46483).
4.3 Arkansas Best Corporation Stock Option Plan filed as Exhibit 10.3
to the Registration Statement on Form S-1 (No. 33-46483) and
incorporated herein by reference.
4.4 Arkansas Best Corporation Disinterested Director Stockholder Plan,
dated May 7, 1993, filed as Exhibit 4.4 to the Registration
Statement on Form S-8 (No. 33-66694) and incorporated herein by
reference.
4.5 Stockholders' Rights Plan by and between Arkansas Best Corporation
and Harris Trust and Savings Bank, as Rights Agent, dated as of
April 23, 1992, filed as Exhibit 10.2 to the Registration Statement
on Form S-1 (No. 33-46483) and incorporated herein by reference.
4.6 Arkansas Best Corporation Employees' Investment Plan, effective as
of January 1, 1994, filed as Exhibit 4.6 to the Registration
Statement on Form S-8 filed with the Commission on March 30, 1994
and incorporated herein by reference.
4.7* Carolina Freight Corporation Employee Savings and Protection Plan
as amended through November 1, 1994, and Amendment No. 1 dated
October 1, 1995.
4.8* Complete Leasing Concepts, Inc. Employee Savings and Profit Sharing
Plan dated October 1, 1993, and Amendment thereto dated October 1,
1995.
4.9* IDI 401(k) Savings Plan, restated effective as of October 1, 1995
4.10* The Arkansas Best Corporation and Affiliates Employees'Investment
Trust No. 1, Trust Agreement Between Arkansas Best Corporation and
Fidelity Management Trust Company Dated as of January 1, 1990, and
Amendment No. 1 dated January 1, 1992, Amendment No. 2 Dated March
13, 1992, Amendment No. 3 dated September 30, 1993, Amendment No. 4
Dated April 1, 1994 and Amendment No. 5 dated as of November 1,
1995.
*23.1 Consent of Ernst & Young LLP, independent auditors.
25 Power of Attorney is found on pages II-6 to II-7 hereof.
____________________
* Filed herewith.
(b) The registrant will submit each Plan in a timely manner to the
Internal Revenue Service (the "IRS") for determination letter that such Plan
is qualified under Section 401 of the Internal Revenue Code and will make all
changes required by the IRS in order to qualify the Plan.
ITEM 9. UNDERTAKINGS.
A. The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement 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;
(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; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the 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 of
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that
it meets all 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 Fort Smith, State of Arkansas, on
October 19, 1995:
ARKANSAS BEST CORPORATION
By: /S/ ROBERT A. YOUNG, III
ROBERT A. YOUNG, III
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert A. Young, III and Donald L. Neal, and
each of them, his true and lawful attorney-in-fact and agents with full power
of substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and to file the
same with all exhibits, thereto, and all documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
<S> <C> <C> <C> <C>
/S/ WILLIAM A. MARQUARD Chairman of the Board of Directors October 19, 1995
WILLIAM A. MARQUARD
/S/ ROBERT A. YOUNG, III President, Chief Executive Officer and October 19, 1995
ROBERT A. YOUNG, III Director
(Principal Executive Officer)
/S/ DONALD L. NEAL Senior Vice President and Chief Financial October 19, 1995
DONALD C. NEAL Officer (Principal Accounting Officer)
/S/ FRANK EDELSTEIN Director October 19, 1995
FRANK EDELSTEIN
/S/ ARTHUR J. FRITZ, JR. Director October 19, 1995
ARTHUR J. FRITZ, JR.
/S/ JOHN H. MORRIS Director October 19, 1995
JOHN H. MORRIS
Director _______, 1995
ALAN J. ZAKON, PH.D
</TABLE>
THE PLAN. Pursuant to the requirements of the Securities Act of 1933,
the Carolina Freight Corporation Savings and Protection Plan Committee have
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Fort Smith, State of
Arkansas, on October 19, 1995.
CAROLINA FREIGHT CORPORATION
EMPLOYEE SAVINGS AND PROTECTION PLAN COMMITTEE
/S/ ROBERT A. YOUNG, III
Robert A. Young, III
/S/ DONALD L. NEAL
Donald L. Neal
/S/ RICHARD F. COOPER
Richard F. Cooper
<PAGE>
THE PLAN. Pursuant to the requirements of the Securities Act of 1933,
the following members of the Complete Leasing Concepts, Inc. Employee Savings
and Profit Sharing Plan has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Fort Smith, State of Arkansas, on October 19, 1995.
COMPLETE LEASING CONCEPTS, INC.
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN COMMITTEE
/S/ ROBERT A. YOUNG, III
Robert A. Young, III
/S/ DONALD L. NEAL
Donald L. Neal
/S/ RICHARD F. COOPER
Richard F. Cooper
<PAGE>
THE PLAN. Pursuant to the requirements of the Securities Act of 1933,
the following members of the Administrative Committee of the IDI 401(k)
Savings Plan has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Fort
Smith, State of Arkansas, on October 19, 1995.
IDI 401(K) SAVINGS PLAN ADMINISTRATIVE COMMITTEE
/S/ DONALD L. NEAL
Donald L. Neal
/S/ RICHARD F. COOPER
Richard F. Cooper
/S/ SHIRLEY J. BOZE
Shirley J. Boze
/S/ RANDALL M. LOYD
Randall M. Loyd
/S/ JERRY A. YARBROUGH
Jerry A. Yarbrough
<PAGE>
EXHIBIT INDEX
Number Description
4.1 Restated Articles of Incorporation of Arkansas Best Corporation, as
amended (incorporated by reference to Exhibit 3.1 to the
registrant's Registration Statement on Form S-3 (Reg. No. 33-
46483))
4.2 Restated Bylaws of the Arkansas Best Corporation (incorporated by
reference to Exhibit 3.2 to the Registrant's Registration Statement
on Form S-3 (Reg. No. 33-46483).
4.3 Arkansas Best Corporation Stock Option Plan filed as Exhibit 10.3
to the Registration Statement on Form S-1 (No. 33-46483) and
incorporated herein by reference.
4.4 Arkansas Best Corporation Disinterested Director Stockholder Plan,
dated May 7, 1993, filed as Exhibit 4.4 to the Registration
Statement on Form S-8 (No. 33-66694) and incorporated herein by
reference.
4.5 Stockholders' Rights Plan by and between Arkansas Best Corporation
and Harris Trust and Savings Bank, as Rights Agent, dated as of
April 23, 1992, filed as Exhibit 10.2 to the Registration Statement
on Form S-1 (No. 33-46483) and incorporated herein by reference.
4.6 Arkansas Best Corporation Employees' Investment Plan, effective as
of January 1, 1994, filed as Exhibit 4.6 to the Registration
Statement on Form S-8 filed with the Commission on March 30, 1994
and incorporated herein by reference.
4.7* Carolina Freight Corporation Employee Savings and Protection Plan
as amended through November 1, 1994, and Amendment No. 1 dated
October 1, 1995.
4.8* Complete Leasing Concepts, Inc. Employee Savings and Profit Sharing
Plan dated October 1, 1993, and Amendment thereto dated October 1,
1995.
4.9* IDI 401(K) Savings Plan Restated as of October 1, 1995.
4.10* The Arkansas Best Corporation and Affiliates Employees' Investment
Trust No. 1, Trust Agreement Between Arkansas Best Corporation and
Fidelity Management Trust Company Dated as of January 1, 1990, and
Amendment No. 1 dated January 1, 1992, Amendment No. 2 Dated March
13, 1992, Amendment No. 3 dated September 30, 1993, Amendment No. 4
Dated April 1, 1994 and Amendment No. 5 dated as of November 1,
1995.
*23.1 Consent of Ernst & Young LLP, independent auditors.
25 Power of Attorney is found on pages II-6 to II-7 hereof.
COMPLETE LOGISTICS COMPANY EMPLOYEE
SAVINGS AND PROFIT SHARING PLAN
_______________
TEXT OF PLAN
October 1, 1993
_______________
COMPLETE LOGISTICS COMPANY
6280 Manchester Boulevard
Buena Park, California 90621
$1$DUA1:[JCULBRETH.INDV-PLN]CLC_PLN.041895
<PAGE>
COMPLETE LOGISTICS COMPANY EMPLOYEE
SAVINGS AND PROFIT SHARING PLAN
(TEXT OF PLAN)
TABLE OF CONTENTS
Page
PREAMBLE ................................................. 1
ARTICLE I. REFERENCES, CONSTRUCTION AND DEFINITIONS ..... 1
1.1 Account ............................................ 2
1.2 Accrued Benefit .................................... 2
1.3 Administrator ...................................... 2
1.4 Affiliate .......................................... 2
1.5 Authorized Leave of Absence ........................ 2
1.6 Before-Tax Contribution ............................ 2
1.7 Before-Tax Subaccount .............................. 2
1.8 Beneficiary ........................................ 2
1.9 Board .............................................. 2
1.10 Break in Service ................................... 3
1.11 Code ............................................... 3
1.12 Committee .......................................... 3
1.13 Company ............................................ 3
1.14 Compensation ....................................... 3
1.15 Deferral Election .................................. 4
1.16 Deferred Retirement ................................ 4
1.17 Direct Rollover .................................... 4
1.18 Disability ......................................... 4
1.19 Disability Retirement .............................. 4
1.20 Early Retirement ................................... 4
1.21 Effective Date ..................................... 4
1.22 Employee ........................................... 4
1.23 Entry Date ......................................... 5
1.24 ERISA .............................................. 5
1.25 Forfeiture Break in Service ........................ 5
1.26 Hours of Service ................................... 5
1.27 Investment Funds ................................... 6
1.28 IRS ................................................ 6
1.29 Matching Contribution .............................. 7
1.30 Matching Subaccount ................................ 7
1.31 Member ............................................. 7
1.32 Normal Retirement .................................. 7
1.33 PAYSOP Subaccount .................................. 7
1.34 Plan ............................................... 7
1.35 Plan Administrator ................................. 7
1.36 Plan Year .......................................... 7
1.37 Prior Plan Provisions .............................. 7
1.38 Profit Sharing Contribution ........................ 7
1.39 Profit Sharing Subaccount .......................... 7
1.40 Re-employment Commencement Date .................... 7
1.41 Regulations ........................................ 8
1.42 Retirement ......................................... 8
1.43 Rollover Contribution .............................. 8
1.44 Rollover Subaccount ................................ 8
1.45 Service ............................................ 8
1.46 Shares ............................................. 8
1.47 Supplemental Matching Contribution ................. 8
1.48 Supplemental Subaccount ............................ 8
1.49 Surviving Spouse ................................... 8
1.50 Termination of Service ............................. 8
1.51 Trust .............................................. 9
1.52 Trust Agreement .................................... 9
1.53 Trust Fund ......................................... 9
1.54 Trustee ............................................ 9
1.55 Valuation Date ..................................... 9
1.56 Year of Service .................................... 9
ARTICLE II. PARTICIPATION IN THE PLAN ................... 10
2.1 Participation ...................................... 10
2.2 Participation Upon Re-employment. .................. 10
2.3 Responsibility for Share Decisions ................. 10
2.4 Cessation of Membership ............................ 10
2.5 Union Employees Excluded ........................... 11
ARTICLE III. CONTRIBUTIONS .............................. 11
3.1 Before-Tax Contributions ........................... 11
3.2 Supplemental Matching Contributions. ............... 12
3.3 Rollover Contributions ............................. 12
3.4 Profit Sharing Contributions ....................... 13
3.5 Matching Contributions ............................. 13
3.6 Reversion of Contributions ............................ 14
3.7 Company Not Responsible for Adequacy of Trust Fund . 14
ARTICLE IV. TRUST FUND .................................. 14
4.1 Establishment of Investment Funds .................. 14
4.2 Investment of PAYSOP Subaccount .................... 15
4.3 Investment Direction ............................... 15
4.4 Transfers of Investments ........................... 16
4.5 Loans .............................................. 16
4.6 Investment in Life Insurance. ...................... 16
ARTICLE V. ALLOCATIONS AND ADJUSTMENTS .................. 17
5.1 Allocations and Adjustments. ....................... 17
5.2 Reports ............................................ 18
5.3 Corrections ........................................ 18
$1$DUA1:[JCULBRETH.INDV-PLN]CLC_PLN.041895
<PAGE>
Page
ARTICLE VI. VESTING ..................................... 18
6.1 Vesting ............................................ 18
6.2 Included Years of Service - Vesting ................ 19
6.3 Normal Retirement. ................................. 20
6.4 Disability ......................................... 20
6.5 Death .............................................. 20
6.6 Distribution to Partially-Vested Member ............ 20
6.7 Restoration of Forfeited Account Balance Upon Re-employment.
20
6.8 Zero Percent (0%) Vested Member .................... 21
6.9 Segregated Accounts ................................ 21
6.10 Forfeiture Occurs .................................. 22
6.11 Distribution Following Hardship Withdrawal or Loan. 22
6.12 Amendment to Vesting Schedule. ..................... 22
ARTICLE VII. PAYMENT OF BENEFITS ........................ 23
7.1 Entitlement ........................................ 23
7.2 Method of Distribution ............................. 23
7.3 Benefit Commencement ............................... 23
7.4 Rollovers .......................................... 24
7.5 Medium of Payment .................................. 25
7.6 Applicable Valuation Date .......................... 25
7.7 Distribution of PAYSOP Subaccount .................. 25
7.8 Limitation on Distributions ........................ 26
7.9 Benefits Subject to Insurance Contract. ............ 26
ARTICLE VIII. MAXIMUM ACCOUNT ADDITIONS ................. 26
8.1 Application ........................................ 26
8.2 Definitions ........................................ 26
8.3 General Rules ...................................... 28
8.4 Order of Reduction ................................. 28
ARTICLE IX. SPECIAL DISCRIMINATION RULES ................ 29
9.1 Definitions ........................................ 29
9.2 Limit on Before-Tax Contributions .................. 31
9.3 ADP Test ........................................... 32
9.4 Special Rules For Determining Average Actual Deferral
Percentage.......................................... 33
9.5 Distribution of Excess ADP Deferrals ............... 34
9.6 ACP Test ........................................... 35
9.8 Distribution of Excess ACP Contributions ........... 36
9.9 Forfeiture of Excess ACP Contributions ............. 37
9.10 Combined ACP and ADP Test .......................... 37
9.11 Order of Applying Certain Sections of Article ...... 39
ARTICLE X. IN-SERVICE WITHDRAWALS ....................... 39
10.1 Hardship Withdrawals ............................... 39
10.2 Withdrawals After Age 59-1/2 ....................... 41
10.3 Withdrawals from Rollover Subaccount ............... 41
ARTICLE XI. LOANS ....................................... 42
11.1 Authority .......................................... 42
11.2 Loan Application ................................... 42
11.3 Claims Procedure ................................... 42
11.4 Loan Limits ........................................ 42
11.5 Adequate Security .................................. 43
11.6 Interest Rate ...................................... 43
11.7 Repayment .......................................... 43
11.8 Default ............................................ 44
11.9 Foreclosure ........................................ 44
11.10 Withdrawals ........................................ 44
11.11 Loan Investment .................................... 44
ARTICLE XII. TOP HEAVY PROVISIONS ....................... 45
12.1 Application ........................................ 45
12.2 Definitions ........................................ 45
12.3 Determination of Top Heavy Status .................. 46
12.4 Minimum Contribution ............................... 47
12.5 Limitations on Contributions ....................... 48
12.6 Other Plans ........................................ 48
ARTICLE XIII. DESIGNATION OF BENEFICIARIES .............. 48
13.1 Beneficiary Designation ............................ 48
13.2 Failure to Designate Beneficiary ................... 49
ARTICLE XIV. ADMINISTRATION OF THE PLAN ................. 49
14.1 Powers and Duties of the Committee ................. 49
14.2 Powers and Duties of Trustee ....................... 50
14.3 Agents; Report of Committee to Board ............... 50
14.4 Structure of Committee ............................. 50
14.5 Adoption of Procedures of Committee ................ 50
14.6 Instructions for Disbursements ..................... 51
14.7 Claims for Benefits ................................ 51
14.8 Hold Harmless ...................................... 52
14.9 Service of Process ................................. 52
14.10 Investment Adviser ................................. 52
ARTICLE XV. TRANSFER OF PLAN ASSETS TO SUCCESSOR PLAN ... 53
ARTICLE XVI. AMENDMENT OR TERMINATION OF THE PLAN AND TRUST 53
16.1 Right to Amend, Suspend or Terminate Plan .......... 53
16.2 Retroactivity ...................................... 54
16.3 Notice ............................................. 54
16.4 No Further Contributions ........................... 54
16.5 Partial Termination. ............................... 55
ARTICLE XVII. GENERAL LIMITATIONS AND PROVISIONS ........ 55
17.1 All Risks on Members and Beneficiaries ............. 55
17.2 Trust Fund is Sole Source of Benefits .............. 55
17.3 No Right to Continued Employment ................... 55
17.4 Payment on Behalf of Payee ......................... 56
17.5 Nonalienation ...................................... 56
17.6 Missing Payee ...................................... 56
17.7 Required Information ............................... 56
17.8 Subject to Trust Agreement ......................... 57
17.9 Communications to Committee ........................ 57
17.10 Transfers .......................................... 57
17.11 Communications from the Company or Committee ....... 57
17.12 Fees and Expenses .................................. 57
17.13 Voting and Tender or Exchange Rights ............... 58
17.14 Exclusive Benefit of Members and Beneficiaries ..... 59
17.15 Additional Powers of the Committee ................. 59
$1$DUA1:[JCULBRETH.INDV-PLN]CLC_PLN.041895
<PAGE>
COMPLETE LOGISTICS COMPANY EMPLOYEE
SAVINGS AND PROFIT SHARING PLAN
EFFECTIVE OCTOBER 1, 1993
PREAMBLE
THE COMPLETE LOGISTICS COMPANY EMPLOYEE SAVINGS AND PROFIT SHARING PLAN
is designed as an incentive to Employees to make and continue careers with
the Company. The Plan provides eligible Employees the opportunity to
regularly set aside a part of their before-tax Compensation and thereby
build additional financial security upon Retirement or in the event of
Disability, death or other Termination of Service. The Plan also allows
the Company to make Profit Sharing Contributions to the Plan. The Before-
Tax Contributions, Matching Contributions and Profit Sharing Contributions
made on behalf of each Member are invested and accumulated in the Trust
Fund free of taxation until distributed when the Member's employment ends.
The Plan, and the Trust Fund established and maintained as part of the
Plan, are intended to constitute a profit sharing plan and trust with a
"cash or deferred arrangement" which are qualified and exempt from
taxation under Code Sections 401(a), 401(k) and 501(a). The Plan and
Trust are also intended to comply with all applicable requirements of
ERISA. All provisions of the Plan, including the Trust Agreement, shall
be interpreted to comply with the applicable requirements of the Code,
ERISA and the Regulations.
All Trust Fund assets, contributions, income and other additions to the
Trust Fund shall be administered, distributed, forfeited and otherwise
governed by the provisions of the Plan and Trust Agreement.
The Employer was formerly known as Complete Leasing Concepts, Inc. and
was a Participating Company in the Carolina Freight Corporation Employee
Savings Plan (the "Prior Plan"). The Employer withdrew from the Prior
Plan effective September 30, 1993, and established this Plan. The
Employer changed its name to Complete Logistics Company on __________.
ARTICLE I. REFERENCES, CONSTRUCTION AND DEFINITIONS
Unless otherwise indicated, all references to articles, sections and
subsections shall be to the Plan as set forth herein. The Plan and all
rights thereunder shall be construed and enforced in accordance with ERISA
and, to the extent that state law is applicable, the laws of the State of
North Carolina. The article titles and the captions preceding sections
and subsections have been inserted solely as a matter of convenience and
in no way define or limit the scope or intent of any provisions. When the
context so requires, the singular includes the plural. Whenever used
herein and capitalized, the following terms shall have the respective
meaning indicated unless the context plainly requires otherwise.
1.1 ACCOUNT: The account (including a Before-Tax Subaccount, PAYSOP
Subaccount, Supplemental Subaccount, Rollover Subaccount, Profit Sharing
Subaccount, Matching Contribution and any other subaccount established
from time to time under such account) maintained to record the interest of
a Member or Beneficiary in the Trust Fund.
1.2 ACCRUED BENEFIT: With respect to each Member, the balance in such
Member's Account as of the applicable Valuation Date, following adjustment
thereof as of such Valuation Date as provided in Article V.
1.3 ADMINISTRATOR: The Employee appointed by the Committee pursuant to
Section 14.1 to perform such administrative duties as the Committee
designates.
1.4 AFFILIATE: Any entity affiliated with the Company within the
meaning of Sections 414(b), (c) or (m) of the Code or under Regulations
prescribed under Section 414(o) of the Code, except that, for purposes of
applying the provisions of Article VIII and Section 12.5 herein with
respect to limitations on contributions, Section 415(h) of the Code shall
apply.
1.5 AUTHORIZED LEAVE OF ABSENCE: A leave of absence authorized
(pursuant to applicable procedures) by the Company or pertinent Affiliate
under the Company's or Affiliate's personnel practices, provided that all
persons under similar circumstances are treated alike in the granting of
such leaves of absence, and provided further that the Employee returns
within the period specified in the leave of absence, or (b) an absence
required to be considered an Authorized Leave of Absence by applicable
law.
1.6 BEFORE-TAX CONTRIBUTION: A contribution made by the Company to the
Trust Fund pursuant to a Deferral Election.
1.7 BEFORE-TAX SUBACCOUNT: The subaccount kept as part of a Member's
Account (a) to account for amounts previously held in the Member's "Salary
Deferral Account" under the Prior Plan Provisions, (b) to account for the
Before-Tax Contributions, if any, made on behalf of the Member, and (c) to
account for all income, expenses, gains, losses and other adjustments
allocable to such subaccount.
1.8 BENEFICIARY: The beneficiary or beneficiaries designated by a
Member pursuant to Article XIII to receive the amount, if any, payable
under the Plan upon the death of such Member, or, where there has been no
such designation or an invalid designation, the individual or entity, or
the individuals or entities, who will receive such amount pursuant to
Article XIII.
1.9 BOARD: The Board of Directors of the Company.
1.10 BREAK IN SERVICE: An applicable computation period, as set forth
in Section 1.56, during which an individual has not completed more than
500 Hours of Service, as determined by the Committee (or its delegate) in
accordance with the Regulations. Solely for purposes of determining
whether a Break in Service has occurred for eligibility purposes, an
individual shall be credited with the Hours of Service in accordance with
Section 1.26 which such individual would have completed but for either (a)
an Authorized Leave of Absence for which such individual is not paid or
entitled to payment or (b) a maternity or paternity absence, as defined in
Section 1.26.
1.11 CODE: The Internal Revenue Code of 1986, as now in effect or as
hereafter amended. All citations to sections of the Code are to such
sections as they may from time to time be amended or renumbered.
1.12 COMMITTEE: The "Complete Logistics Company Employee Savings and
Profit Sharing Plan Committee" appointed by the Board and as provided for
in Article XIV. For purposes of ERISA, the Committee shall be the "Plan
Administrator" and as such is a named fiduciary of the Plan.
1.13 COMPANY: Complete Logistics Company, a California corporation,
formerly known as Complete Leasing Concepts, Inc., or any entity which
succeeds to its rights and obligations with respect to the Plan.
1.14 COMPENSATION: Cash remuneration actually paid by the Company to
an Employee for Service during the Plan Year which constitutes "wages"
within the meaning of Section 3401(a) of the Code (for purposes of income
tax withholding at the source) but determined without regard to any rules
that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the
exception for agricultural labor in Section 3401(a)(2)) plus such
remuneration which, but for the deferral thereof pursuant to Sections 125
and 401(k) of the Code, would have been reported on Form W-2.
An Employee's Compensation in excess of $200,000 (as adjusted upwards
from time to time pursuant to Code Section 415(d)(1)) shall be
disregarded. In determining the Compensation of a Member for purposes of
this limitation, the rules of Code Section 414(q)(6) shall apply, except
in applying such rules, the term "family" shall include only the spouse of
the Member and any lineal descendants of the Member who have not attained
age 19 before the close of the year. If, as a result of the application
of such rules the adjusted $200,000 limitation is exceeded, then the
limitation shall be prorated among the affected individuals in proportion
to each such individual's Compensation as determined under this Section
prior to the application of this limitation.
In addition to other applicable limitations set forth in the Plan and
notwithstanding any other provision of the Plan to the contrary, for Plan
Years beginning on or after January 1, 1994, the annual Compensation of
each Member taken into account under the Plan shall not exceed
$150,000.00, as adjusted for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment in
effect for a calendar year applies to any period, not exceeding twelve
months, beginning in such calendar year, over which Compensation is
determined (determination period). If a determination period consists of
fewer than twelve months, the annual compensation limit of Section
401(a)(17)(B) will be multiplied by a fraction, the numerator of which is
a number of months in the determination period and the denominator of
which is twelve. For Plan Years beginning on or after January 1, 1994,
any reference in this Plan to the limitation under Section 401(a)(17) of
the Code shall mean $150,000.00 as adjusted for increases in the cost-of-
living.
1.15 DEFERRAL ELECTION: A Member's written election filed with the
Administrator whereby the Member elects to forgo the receipt of a
specified percentage of Compensation on the condition that the Company
make Before-Tax Contributions in an amount equal to the amount of
Compensation forgone.
1.16 DEFERRED RETIREMENT: Termination of Service after the Member's
65th birthday, other than on account of death.
1.17 DIRECT ROLLOVER: A payment by the Plan to the eligible retirement
plan specified by the distributee.
1.18 DISABILITY: A physical or mental condition which totally and
permanently prevents such Employee from performing the regular duties of
the Employee's job as the Committee in the exercise of its sole and
absolute discretion shall determine based upon competent medical evidence
satisfactory to the Committee.
1.19 DISABILITY RETIREMENT: Termination of Service which the Committee
determines, in the exercise of its sole discretion, to be on account of
Disability.
1.20 EARLY RETIREMENT: Termination of Service, other than on account
of death, on or after a Member's 55th birthday but before such Member's
65th birthday.
1.21 EFFECTIVE DATE: The "Effective Date of the Plan" is October 1,
1993, except as otherwise provided with respect to a particular provision.
1.22 EMPLOYEE: Except as otherwise provided herein, a person who is a
common law employee of the Company or an Affiliate. In determining who is
an Employee for purposes of this Plan, the following special provisions
shall apply to the extent applicable:
(a) Each leased employee, within the meaning of Code Section 414(n),
shall be treated as an Employee. Notwithstanding the foregoing, however,
if all such leased Employees constitute less than 20 percent of the non-
highly compensated work force, as defined in Code Section
414(n)(5)(C)(ii), of the Company and Affiliates, this Section 1.22 shall
not apply to any leased Employee covered by a retirement plan described in
Code Section 414(n)(5).
(b) Each individual who is a nonresident alien and who receives no
income from the Company or an Affiliate which constitutes income from
sources within the United States shall not be treated as an Employee.
1.23 ENTRY DATE: With respect to an Employee, the day on which such
Employee enters the membership of the Plan as provided in Section 2.1.
Entry Dates are the January 1, April 1, July 1, and October 1 of each
Plan Year during which the Plan is in effect.
1.24 ERISA: The Employee Retirement Income Security Act of 1974, as
now in effect or as hereafter amended. All citations to sections of ERISA
are to such sections as they may from time to time be amended or
renumbered.
1.25 FORFEITURE BREAK IN SERVICE: A Member incurs a Forfeiture Break
in Service when the Member incurs five consecutive Breaks in Service.
1.26 HOURS OF SERVICE: Hours of Service shall include (a) each hour
for which an Employee is paid or entitled to payment by the Company or an
Affiliate for Service; (b) each hour for which an Employee is paid or
entitled to payment by the Company for reasons other than for Service
(such as vacation, holiday, illness, incapacity (including Disability),
lay-off, jury duty, military duty or leave of absence); (c) each hour (to
the extent not included in (a) or (b)) for which back pay (irrespective of
mitigation of damages) has been either awarded or agreed to by the Company
or an Affiliate; and (d) each hour for which an Employee is not actually
in Service but is required to be given credit for Service under any law of
the United States; provided, that in applying paragraph (b) for periods in
which an Employee is not actually in Service, the following special
provisions shall apply:
(a) The number of hours to be credited with respect to any single
continuous period shall be the lesser of: (A) 501 hours, or (B) the
number of hours for which the Employee is paid with respect to such
period;
(b) No hours shall be credited with respect to payments made to the
Employee for the purpose of complying with applicable workers'
compensation, unemployment compensation or disability insurance laws, or
payments solely to reimburse an Employee for medical or medically related
expenses incurred by the Employee; and
(c) An amount paid to an Employee by the Company or an Affiliate
indirectly, such as by a trust, fund or insurer to which the Company or an
Affiliate makes contributions or pays premiums, shall be deemed to be paid
by the Company or Affiliate.
Notwithstanding the foregoing provisions of this Section 1.26, solely
for the purpose of determining whether an Employee has incurred a Break in
Service, the following special provisions shall apply:
(A) In addition to hours for which an Employee is entitled to credit
under (a) through (d) above, such Employee shall also receive credit for
each hour with respect to the period that such Employee is on an
Authorized Leave of Absence for which such Employee is not paid or
entitled to payment.
(B) An Employee who is absent from work for maternity or paternity
reasons shall receive credit for the Hours of Service which would
otherwise have been credited to such Employee but for such absence, or in
any case in which such hours cannot be determined, 8 Hours of Service per
day of such absence. For purposes of this paragraph (b), an absence from
work for maternity or paternity reasons means an absence (i) by reason of
the pregnancy of the Employee, (ii) by reason of a birth of a child of the
Employee, (iii) by reason of the placement of a child with the Employee in
connection with the adoption of such child by such Employee, or (iv) for
purposes of caring for such child for a period beginning immediately
following such birth or placement. The Hours of Service credited under
this paragraph (b) shall be credited with respect to the Plan Year in
which the absence begins, if the crediting is necessary to prevent a Break
in Service in that Plan Year; in all other cases, such Hours of Service
shall be credited in the following Plan Year.
An Employee with respect to whom the Company or Affiliate maintains
records of hours for which payment is made or due shall be credited with
Hours of Service on the basis of such records. Any other Employee shall
be credited with Hours of Service on the basis of 45 hours for each week
such Employee is paid or entitled to payment for any part of such week.
Subject to the provisions of paragraph (b) of this Section 1.26, with
respect to any Employee who is entitled to receive credit for Service for
a period such Employee is not paid or entitled to payment, such Employee
shall be credited with 45 Hours of Service for each week or part thereof
during such period. The provisions of this Section 1.26 shall be applied
in accordance with the provisions of United States Department of Labor
Regulations Sections 2530.200b-2(b) and (c), which provisions are
incorporated herein by reference.
1.27 INVESTMENT FUNDS: The separate subfunds of the Trust Fund
maintained for investment purposes, as provided in Article IV.
1.28 IRS: The United States Internal Revenue Service.
1.29 MATCHING CONTRIBUTION: The contribution the Company makes to the
Trust Fund pursuant to Section 3.5.
1.30 MATCHING SUBACCOUNT: The subaccount kept as part of a Member's
Account (a) to account for Matching Contributions and (b) to account for
income, expenses, gains, losses and other adjustments allocable to this
subaccount.
1.31 MEMBER: With respect to a Plan Year, an Employee who is enrolled
in the Plan as provided in Article II and a former Employee who has an
Accrued Benefit for the Plan Year.
1.32 NORMAL RETIREMENT: Termination of Service, other than on account
of death, on the Member's 65th birthday (the "Normal Retirement Age").
1.33 PAYSOP SUBACCOUNT: The subaccount kept as part of a Member's
Account (a) to account for amounts previously held in the Member's "PAYSOP
Account" under the Prior Plan Provisions which were transferred from the
former Carolina Freight Corporation Payroll-Based Employee Stock Ownership
Plan to the Carolina Freight Corporation Employee Savings and Protection
Plan to this Plan and (b) to account for all income, expenses, gains,
losses and other adjustments allocable to such subaccount.
1.34 PLAN: Complete Logistics Company Employee Savings and Profit
Sharing Plan, as now in effect or as hereafter amended.
1.35 PLAN ADMINISTRATOR: The Committee.
1.36 PLAN YEAR: The period beginning on October 1, 1993 and ending on
December 31, 1993. Thereafter, the period beginning on each January 1 and
ending on the first December 31 thereafter.
1.37 PRIOR PLAN PROVISIONS: The text of the Carolina Freight
Corporation Employee Savings and Protection Plan document as amended and
restated effective January 1, 1987, as amended by amendments dated October
1, 1987, May 3, 1989, June 30, 1989 and October 1, 1992.
1.38 PROFIT SHARING CONTRIBUTION: The contribution the Company makes
to the Trust Fund pursuant to Section 3.4.
1.39 PROFIT SHARING SUBACCOUNT: The subaccount kept as part of a
Member's Account (a) to account for Profit Sharing Contributions, if any,
made by the Company and (b) to account for income, expenses, gains, losses
and other adjustments allocable to this subaccount.
1.40 RE-EMPLOYMENT COMMENCEMENT DATE: The date on which an Employee
first performs an Hour of Service after a Break in Service.
1.41 REGULATIONS: The applicable regulations issued under the Code,
ERISA or other applicable law by the IRS, the Department of Labor or any
other governmental authority, and any temporary or other appropriate and
effective regulations or rules promulgated by such authorities pending the
issuance of such regulations.
1.42 RETIREMENT: The Member's Normal Retirement, Early Retirement,
Deferred Retirement or Disability Retirement. The term "Retire" means the
act of taking Retirement.
1.43 ROLLOVER CONTRIBUTION: The contribution an Employee makes to the
Trust Fund pursuant to Section 3.3, and in accordance with Code Section
402(c)(5), of a distribution from a retirement plan qualified under Code
Section 401(a).
1.44 ROLLOVER SUBACCOUNT: The subaccount kept as part of a Member's
Account (a) to account for amounts previously held in the Member's
"Rollover Account" under the Prior Plan Provisions, (b) to account for
Rollover Contributions, if any, made by an Employee and (c) to account for
income, expenses, gains, losses and other adjustments allocable to such
subaccount.
1.45 SERVICE: Employment with the Company or any Affiliate, including
periods of employment with an Affiliate rendered by an individual prior to
the date the Affiliate became an Affiliate. Service also includes periods
of employment with a predecessor employer as required by Code Section
414(a) and the Regulations thereunder. Service may also include any
period of a Member's prior employment by any organization upon such terms
and conditions as the Company may approve and subject to any required IRS
approval.
1.46 SHARES: The common stock issued by Carolina Freight Corporation
or any successor corporation thereto which is held in the Trust Fund.
1.47 SUPPLEMENTAL MATCHING CONTRIBUTION: A contribution made by the
Company to the Trust Fund to match Before-Tax Contributions at such rate
and in such amount as the Committee determines pursuant to Section 3.2 is
necessary to meet the ADP Test under Section 9.3.
1.48 SUPPLEMENTAL SUBACCOUNT: The subaccount kept as part of a
Member's Account (a) to account for the Supplemental Matching
Contributions, if any, made on behalf of the Member and (b) to account for
all income, expenses, gains, losses and other adjustments allocable to
such subaccount.
1.49 SURVIVING SPOUSE: The survivor of a deceased Member to whom such
deceased Member had been legally married (as determined by the Committee)
immediately before the Member's death.
1.50 TERMINATION OF SERVICE: A termination of employment with the
Company or an Affiliate as determined by the Committee in accordance with
reasonable standards and policies adopted by the Committee; provided that
a Termination of Service shall occur on the earlier of (a) or (b) where:
(a) is the date as of which an Employee quits, is discharged, Retires
or dies, and
(b) is the first day of absence of an Employee who fails to return to
employment at the expiration of an Authorized Leave of Absence.
1.51 TRUST: The Complete Logistics Company Employee Savings and Profit
Sharing Plan Trust, created by the Trust Agreement entered into between
the Company and the Trustee.
1.52 TRUST AGREEMENT: The agreement by and between the Company and the
Trustee, as it may from time to time be amended.
1.53 TRUST FUND: All cash and other assets deposited with or acquired
by the Trustee in its capacity as such hereunder, together with
accumulated income, subject to all liabilities incurred by the Trustee in
its capacity as such and less all disbursements made in respect thereof.
1.54 TRUSTEE: The entity serving as a trustee under the Trust
Agreement.
1.55 VALUATION DATE: The last day of each calendar month of the Plan
Year and any other date during the Plan Year specified by the Committee,
upon or as of which the assets and liabilities of the Trust Fund are
valued and Accounts are adjusted, as prescribed in Article V.
1.56 YEAR OF SERVICE: With respect to an individual, a Year of Service
shall accrue on the date on which such individual completes at least 1,000
Hours of Service during the applicable computation period of 12
consecutive months. The initial computation period shall begin with the
date the Employee first performs an Hour of Service. If an Employee
incurs a Break in Service before completing a Year of Service, such
Employee's initial computation period shall begin with the Employee's Re-
employment Commencement Date. If the Employee does not complete 1,000
Hours of Service during the initial computation period, subsequent
computation periods shall be each 12 month period beginning January 1 and
ending December 31, beginning with the first January 1 following the date
the Employee first performed an Hour of Service or the Employee's Re-
employment Commencement Date, as the case may be.
In calculating a Year of Service for participation purposes, credit
shall be given for service performed for Flanagen Trucking Services, Inc.
for the period prior to June 27, 1994.
ARTICLE II. PARTICIPATION IN THE PLAN
1 PARTICIPATION. Each individual who was a member of the Carolina
Freight Corporation Employee Savings and Protection Plan immediately prior
to the Effective Date of this Plan and who is an Employee as of the
Effective Date shall be enrolled as a Member of the Plan as of the
Effective Date. Each individual who is an Employee on the Effective Date
and who has attained the age of 21 and completed one Year of Service shall
also be enrolled as a Member of the Plan as of the Effective Date. Each
other individual who is an Employee on or after the Effective Date shall
be enrolled as a Member of the Plan as of the Entry Date next following
such individual's attainment of age 21 and completion of one Year of
Service, provided, such individual is an Employee on such Entry Date.
Notwithstanding anything hereinabove to the contrary, in no event shall
any individual become a Member if such individual (a) is a leased employee
as defined in Code Section 414(n)(2), (b) is an Employee of an Affiliate,
or (c) irrevocably elects not to become a Member.
2 PARTICIPATION UPON RE-EMPLOYMENT.
(A) If an Employee incurs a Termination of Service after satisfying the
age and service requirements in Section 2.1 above but before becoming a
Member and is subsequently reemployed by the Company, such Employee may
enroll in the Plan and become a member on the later of the date the
Employee again performs an Hour of Service or the Entry Date that was
applicable under Section 2.1 above.
(B) If a Member incurs a Termination of Service and is subsequently
reemployed by the Company, such individual shall be eligible to
participate in the Plan on the date such individual again performs an Hour
of Service.
3 RESPONSIBILITY FOR SHARE DECISIONS. By participating in the Plan,
each Member shall have accepted the responsibility for exercising the
voting, tender and exchange rights conferred in Section 17.13 with respect
to Shares allocated to the Member's PAYSOP Subaccount.
4 CESSATION OF MEMBERSHIP. The membership of a Member shall end when
no further benefits are payable to such Member or on such Member's account
under the Plan. No allocation of contributions shall be made for the
benefit of a Member in the Plan on or after the date on which such Member
has a Termination of Service or otherwise ceases to be an Employee of the
Company and before the day, if any, on which the individual next performs
an Hour of Service as an Employee of the Company, except that earnings and
losses shall be allocated to the Member's Account in the manner provided
in Article V; provided that a Member shall be entitled to receive an
allocation of contributions as if such Member were an Employee of the
Company on the last day of the Plan Year for the Plan Year during which
the Member has a Termination of Service due to Retirement, Disability or
death.
5 UNION EMPLOYEES EXCLUDED. Employees covered by a collective
bargaining agreement wherein retirement benefits were made the subject of
good faith bargaining between the representative of the Employees and the
Company shall not be eligible for participation in the Plan unless the
collective bargaining agreement provides for the continued participation.
An employee shall not be ineligible during the period between the
selection of the union and the first collective bargaining agreement which
covers him.
ARTICLE III. CONTRIBUTIONS
1 BEFORE-TAX CONTRIBUTIONS.
(a) Subject to the limitations of Articles VIII and IX, the Company
shall make Before-Tax Contributions for each Member in accordance with the
Member's Deferral Election, if any, and this Section 3.1. The Company
shall deliver such Before-Tax Contributions to the Trustee as soon as
practicable after the end of the payroll period to which they relate, but
in no event shall Before-Tax Contributions for a Plan Year be delivered to
the Trustee later than 60 days after the end of such Plan Year.
(b) An Employee may file an initial Deferral Election with the
Administrator at any time, and such Deferral Election shall take effect as
soon as practicable, but not before the Employee's Entry Date. Subject to
Section 10.1(c), a Deferral Election shall remain in effect until
terminated. A Deferral Election may be terminated by the Member by filing
with the Administrator the form provided for that purpose, and the
termination shall take effect as soon as practicable thereafter. After
such a termination, a Member may file a new Deferral Election with the
Administrator at any time, which election will take effect as soon as
practicable after the first Entry Date thereafter. A Deferral Election
shall terminate automatically upon a Member's Termination of Service. A
Member may change the Deferral Election no more often than once a month
and no more than six times during a Plan Year by filing an amendment with
the Administrator, and such amendment shall become effective as soon as
practicable after the filing of the amendment. A Member's Deferral
Election may be terminated at any time, effective as soon as practicable
following the filing with the Administrator of notice of such termination
on the form provided by the Administrator for that purpose.
(c) Each Deferral Election shall state the percentage of Compensation
the Member wishes to forgo. A Member may elect to forgo a percentage of
the Member's Compensation, expressed as a whole percentage, not to exceed
20 percent; provided, however, that any Member for whom 20 percent of
Compensation is greater than the limit specified in Section 9.2(a) and for
whom such limit falls between 2 whole percentages of the Member's
Compensation, may elect an allocation of such limit in lieu of an election
of a whole percentage of Compensation. The deferral percentage, or, if
elected, the amount obtained by dividing the limit by the number of pay
periods in the Plan Year shall apply to each paycheck paid while the
Deferral Election is in effect.
2 SUPPLEMENTAL MATCHING CONTRIBUTIONS. If, as of the last day of
each Plan Year, the "Average Actual Deferral Percentage", as defined in
Section 9.1(b), for all "Highly Compensated Employees", as defined in
Section 9.1(f), for the Plan Year ending on that date exceeds the maximum
percentage which will pass the "ADP Test" set forth in Section 9.3 for
such Plan Year, the Company may make a Supplemental Matching Contribution
to the Plan to be allocated to the Supplemental Subaccount of each Member
who was a "Non-highly Compensated Employee" on such day and for whom
Before-Tax Contributions were made for the Plan Year ending on that date
and who was an Employee or on an Authorized Leave of Absence on such date
or who died or Retired during that year. The Supplemental Matching
Contribution shall equal such amount, which may be a specified amount or a
percentage of compensation, as the Committee determines in its sole
discretion to be necessary to raise the Average Actual Deferral Percentage
of Non-highly Compensated Employees to the lowest percentage which will
cause the Plan to pass the ADP Test for such Plan Year and shall be
allocated based on the Before-Tax Contributions made on the Member's
behalf and not withdrawn under Article X or refunded under Sections 8.4,
9.2 or 9.5 for the Plan Year. Such contributions shall be fully vested
and nonforfeitable and treated as Before-Tax Contributions for application
of the ADP Test under Section 9.3.
3 ROLLOVER CONTRIBUTIONS. An Employee of the Company, other than a
leased employee as defined in Code Section 414(n)(2), or an Employee who
irrevocably elects not to become a Member, shall be permitted to transfer
to the Trust Fund, and the Trustee shall accept: (a) lump sum
distributions from another qualified plan which are eligible for tax-free
rollover to a qualified plan and which are directly transferred from the
other qualified plan to this Plan; (b) lump sum distributions received by
an Employee from another qualified plan which are eligible for tax-free
rollover to a qualified plan and which are transferred by the Employee to
this Plan within 60 days following such Employee's receipt thereof;
(c) amounts transferred to this Plan from a conduit individual retirement
account provided that the conduit individual retirement account has no
assets other than assets which (1) were previously distributed to the
Employee by another qualified corporate (and, after December 31, 1983,
noncorporate) plan as a lump sum distribution, (2) were eligible for tax-
free rollover to a qualified corporate or noncorporate plan and (3) were
deposited in such conduit individual retirement account within 60 days of
receipt thereof and other than earnings on said assets; (d) amounts
distributed to the Employee from a conduit individual retirement account
meeting the requirements of clause (c) above and transferred by the
Employee to this Plan; and (e) amounts transferred from another plan in
accordance with Section 17.10. Such transfers shall be subject to the
following provisions: (A) prior to accepting any transfers to which this
Section applies, the Committee may require the Employee to establish that
the amounts to be transferred to this Plan meet the requirements of this
Section and may also require the Employee to provide an opinion of counsel
satisfactory to the Committee that the amounts to be transferred meet the
requirements of this Section; (B) such transfer must satisfy the
requirements of Code Section 402(c); (C) permission shall be given only
if, on advice of legal counsel for the Company, the transfer will not
jeopardize the status of the Trust Fund as tax-exempt under Code Section
501(a) and the status of the Plan as qualified under Code Section 401(a);
(D) no transfer shall be accepted all or a part of which consists of
insurance contracts; and (E) no transfer of assets subject to the survivor
annuity rules of Code Section 401(a)(11) shall be accepted if the transfer
will cause this Plan to be considered a transferee plan required to
provide automatic survivor benefits. All contributions under this Section
3.3 shall be nonforfeitable.
The Committee must treat an Employee who has made a Rollover
Contribution to the Trust prior to satisfying the Plan's eligibility
conditions as a Member for all purposes of the Plan except the Employee is
not treated as a Member for purposes of sharing in Profit Sharing
Contributions under the Plan.
4 PROFIT SHARING CONTRIBUTIONS. The Company may, in its sole
discretion, elect to make a Profit Sharing Contribution to the Plan. The
Profit Sharing Contribution shall be allocated among all eligible Members
for the Plan Year in proportion to Compensation. For purposes of this
Section only, an eligible Member shall be each Member who has completed at
least 1,000 Hours of Service for the Company and is an Employee of the
Company on the last day of the Plan Year or who incurred a Termination of
Service during the Plan Year due to Retirement, Disability or death. Such
Member shall be eligible to receive an allocation hereunder whether or not
the Member elects to defer a portion of the Member's income to this or any
other tax-qualified plans sponsored by the Company. Each Member's share
of the Profit Sharing Contribution shall be allocated to the Member's
Profit Sharing Subaccount.
5 MATCHING CONTRIBUTIONS. Subject to the limitations of Articles
VIII and IX, the Company shall make a Matching Contribution for each
Member who made Before-Tax Contributions. The Matching Contribution for
the Member shall be in an amount equal to 25% of the first 5 percent of
Compensation that the Member elects to defer pursuant to Section 3.1. The
Matching Contribution may be adjusted periodically by the Board.
6 REVERSION OF CONTRIBUTIONS.
(a) Qualification. Notwithstanding any other provisions herein
contained, this Plan is entered into on the conditions that the Plan and
the Trust Agreement shall be approved by the IRS as a qualified and exempt
plan and trust under the provisions of the Code and Regulations so that
contributions to the Trust may be deducted for Federal income tax
purposes, within the limits of the Code and Regulations, and be nontaxable
to Members when contributed. If such approval should be denied for any
reason (including failure to comply with any conditions for such approval
imposed by the IRS), contributions made after the execution of the Trust
Agreement and prior to such denial and all assets in the Trust Fund shall
be returned to the Company, without any liability to any person, within
one year after the date of denial of such approval.
(b) Mistake of Fact. Notwithstanding any other provisions herein
contained, if any contribution is made due to a mistake of fact, such
contribution shall upon the direction of the Company, which shall be given
in conformity with the provisions of ERISA, be returned to the Company or
the parties who made it, as directed by the Company, without liability to
any person.
(c) Deduction. Notwithstanding any other provisions herein contained,
all contributions are hereby expressly conditioned upon their
deductibility under Section 404 of the Code and Regulations, as amended
from time to time, and if the deduction for any contribution is disallowed
in whole or in part, then such contribution (to the extent the deduction
is disallowed) shall upon direction of the Committee, which shall be given
in conformity with the provisions of ERISA, be returned, without liability
to any person, within one year after such disallowance.
7 COMPANY NOT RESPONSIBLE FOR ADEQUACY OF TRUST FUND. Except as and
if required by applicable law, neither the Board, the Company, the
Committee, any member of the Committee nor the Trustee shall be
responsible for the adequacy of the Trust Fund to meet and discharge Plan
liabilities.
ARTICLE IV. TRUST FUND
1 ESTABLISHMENT OF INVESTMENT FUNDS. All monies, securities or other
property received as contributions under the Plan shall be delivered to
the Trustee under the Trust, to be managed, invested, reinvested and
distributed for the exclusive benefit of the Members and their
Beneficiaries in accordance with the Plan, the Trust Agreement and any
agreement with an insurance company or other financial institution
constituting a part of the Plan and Trust. By written notice to the
Trustee, the Committee may delegate to itself the authority to exercise
investment management responsibilities over all or any portion of the
Trust Fund. The Trustee, at the direction of the Committee, shall cause
to be established or maintain one or more of the following types of
Investment Funds for the investment of the Trust Fund, provided that the
Committee shall have the sole discretion to direct the Trustee to change,
add or eliminate any such funds from time to time.
(a) Income Fund. A low risk investment fund, the assets of which
consist primarily of one or more guaranteed income contracts issued by an
insurance company, one or more certificates of deposit issued by a
national bank or savings and loan association, one or more direct
obligations of the United States government or any agency thereof, or one
or more obligations guaranteed as to principal and interest by the United
States government or an agency thereof. It may also include contracts
purchased from a financial institution intended to limit the volatility of
the Plan investment results.
(b) Equity Fund. An investment fund with a higher-than-average risk
that consists primarily of such capital, common or other forms of equity
stocks, or securities convertible into common or capital stock as may be
purchased pursuant to the Trust Agreement.
(c) Balanced Fund. An investment fund with below average risk that
invests primarily in common stocks and fixed income securities.
(d) Bond Fund. An investment fund that consists primarily of fixed
income securities.
(e) GIC Fund. An investment fund that consists primarily of
investments in guaranteed income contracts.
(f) Stock Fund. Prior to December 31, 1990, Members could elect to
invest contributions in this fund pursuant to Prior Plan Provisions. This
fund is maintained by the Trustee and consists primarily of shares of
Carolina Freight Corporation as well as such amount of cash and cash
equivalents as is necessary to manage the fund.
2 INVESTMENT OF PAYSOP SUBACCOUNT. A Member's PAYSOP Subaccount
shall at all times be invested in the Stock Fund.
3 INVESTMENT DIRECTION. A Member may elect, in such manner and form
as the Administrator prescribes, to direct the investment of contributions
allocated to such Member's Before-Tax, Supplemental, Matching, Profit
Sharing and Rollover Subaccounts, in the various Investment Funds
established by the Trustee; provided, however, that a Member may not
direct the investment of contributions in the Stock Fund. Notwithstanding
the foregoing, the Member may not provide investment direction with
respect to the portion of contributions used to pay insurance premiums on
any life insurance policy allocated to the Member's Account. In the event
an effective investment direction is not made by the Member pursuant to
this Section 4.3, all such contributions shall be invested in the Income
Fund. A Member may direct the investment of such contributions in
multiples of 10 percent of the amount of the contribution. All investment
directions given by a Member shall be deemed to be a continuing direction
until changed. A Member may change such Member's investment direction, in
such manner and form as prescribed by the Administrator, no more often
than once a month and no more than six times during a Plan Year, and such
new investment direction shall become effective as soon as practicable
following the receipt by the Administrator of such direction.
4 TRANSFERS OF INVESTMENTS. A Member may elect in such manner and
form as the Administrator prescribes, to transfer amounts in such Member's
Before-Tax, Supplemental, Matching, Profit Sharing and Rollover
Subaccounts (but not PAYSOP Subaccount) into and out of the various
Investment Funds; provided, however, that no amounts may be transferred
into the Stock Fund. The minimum amount that can be transferred out of
any one Investment Fund is 10 percent of the value of the Member's
Account, or if less, the entire amount invested in such Investment Fund.
5 LOANS. A loan to a Member under Article XI shall be from such
Member's Account and shall be considered an earmarked investment of the
Member's Account. A loan to a Member shall reduce each subaccount on a
pro rata basis and shall be charged against the Investment Funds each
subaccount is invested in on a pro rata basis. Loan repayments shall
reduce the amount of the loan to the extent they represent principal and
shall be invested in the Investment Funds in accordance with the Member's
then existing investment direction. For loans made before August 1, 1994,
repayments shall be credited to the Member's Before Tax Subaccount. For
loans made on or after August 1, 1994, repayments shall be credited to the
Member's subaccounts on a pro rata basis based on the amount of loan
proceeds withdrawn from each subaccount to originate the loan.
6 INVESTMENT IN LIFE INSURANCE.
(a) New investments in individual or group insurance policies insuring
the life of the Member and the Member's dependents are not allowed. With
respect to a Member who transferred such a policy or contract to this Plan
from the Prior Plan, such policy or contract shall be considered earmarked
investments of the Member's Account, and premiums for such policies shall
be paid out of the contributions allocated to a Member's Account, provided
that no more than 49.99% of the aggregate amount of Before-Tax, Profit
Sharing, Supplemental and Matching Contributions made on behalf of a
Member may be invested in ordinary life insurance contracts on the life of
such Member or such Member's dependents and not more than 24.99% may be
invested in term life insurance contracts. If both ordinary and term life
insurance contracts are specifically allocated to the Member's Account,
the sum of the annual term life insurance premium plus one-half of the
ordinary life insurance premium may not exceed 24.99% of the Before-Tax,
Profit Sharing, Supplemental and Matching Contributions made on behalf of
such Member for a Plan Year. For purposes of this Section 4.6, universal
life insurance which specifically limits the current insurance element to
no more than 50% of the premium charges shall be considered ordinary life
insurance.
(b) The beneficiary of all life insurance policies held in a Member's
Account shall be such Member's Account. Upon the death of a Member's
covered dependent, a death benefit shall be payable to the Member from the
Member's Account in the amount of the excess, if any, of the insurance
proceeds over the cash value of the policy at the date of death of the
insured, subject to the right of the Member to elect to retain such death
benefit in the Member's Account on a form provided by the Administrator
for that purpose.
(c) Dividends payable on any policy or contract specifically allocated
to a Member's Account shall be used to provide additional benefits for the
Member or shall be credited to the Member's Account.
(d) A Member who has a policy allocated to such Member's Account may
not borrow amounts from insurers issuing such policy on the collateral of
such policy. The Committee, however, in its discretion, may borrow
against such policy to fund loans under Article XI.
ARTICLE V. ALLOCATIONS AND ADJUSTMENTS
1 ALLOCATIONS AND ADJUSTMENTS.
(a) Forfeiture Allocation. Subject to any restoration allocation
required under Article VI, the Committee will allocate Member forfeitures
which occur pursuant to Section 6.10 or 17.6 to first reduce the Company's
Matching Contributions for the Plan Year in which the forfeiture occurs,
then to reduce the Company's Profit Sharing Contribution for the Plan Year
in which the forfeiture occurs and then among the Participants as if the
forfeitures were an Employer Profit Sharing Contribution.
(b) Revaluation of Trust Fund. The assets of the Trust Fund shall be
revalued by the Trustee monthly on the last day of each calendar month,
and in making such revaluation the Trustee shall take into account
earnings or losses of the Trust Fund net of reasonable expenses and
capital appreciation or depreciation in such assets whether or not
realized. The method of revaluation shall be determined by the Trustee,
and shall be followed with reasonable consistency from month to month.
(c) Adjustment of Accounts. The aggregate amount credited to the
Account of all Members having Accounts in the Trust Fund shall be adjusted
monthly as of each Valuation Date in the manner described herein so as to
be equal to the value of the assets on such date less the cash value of
all life insurance policies. Before allocating earnings to the Members'
subaccounts each Member's subaccounts will be decreased by the cash
surrender value of any life insurance policies held by the subaccounts, by
age 59 1/2 distributions and hardship distributions that constitute less
than a full distribution of the Members' subaccounts, by forfeitures and
by full distributions of a Member's vested subaccounts that occurred in
the prior month. The Member's Account will be increased by contributions
(less any life insurance premiums paid that month), loan payments and
rollovers made on behalf of the Member during the current month, provided
that rollovers of amounts in excess of $50,000 that are received by the
Administrator after the fifteenth day of the current month will not
increase a Member's Account for purposes of this subsection until the
month following the Administrator's receipt of the rollover. Then, based
on the Member's investment fund elections, the Member's subaccounts will
be divided among the various investment funds. The earnings or loss of
each investment fund for the month is then divided pro rata among all
subaccounts invested in each investment fund.
2 REPORTS. After completing the allocations provided for in Section
5.1, the Committee shall prepare a statement which shows the value of each
Account then maintained by the Trustee for a Member, or where appropriate,
for a Beneficiary. The Committee also shall prepare quarterly an Account
statement for each Member and, where appropriate, each Beneficiary, which
may be forwarded to that person and which shows the contributions to the
Account of a Member for the relevant period of the Plan Year and the then
value of that Account.
3 CORRECTIONS. If an error or omission is discovered in any Account,
the Committee shall make such adjustment as it deems necessary to remedy
in an equitable manner such error or omission in such Account not later
than the last day of the Plan Year in which the error or omission is
discovered.
ARTICLE VI. VESTING
1 VESTING.
(a) A Member shall at all times be fully vested in the Member's Before-
Tax Subaccount, Supplemental Subaccount and Rollover Subaccount.
(b) Except as otherwise provided in Sections 6.3 through 6.6, a
Member's nonforfeitable percentage of the Member's Matching Subaccount and
Profit Sharing Subaccount shall be determined in accordance with the
following vesting schedule:
YEARS OF SERVICE PERCENT VESTED
Less than 3 years 0%
At least 3 years 20%
At least 4 years 40%
At least 5 years 60%
At least 6 years 80%
At least 7 years or more 100%
(c) For each year that the Plan is a Top-Heavy Plan (as that term is
defined in Section 12.3), the following vesting schedule shall apply and
shall be treated as a Plan amendment to this Plan:
YEARS OF SERVICE PERCENT VESTED
Less than 1 year 0%
At least 2 years 20%
At least 3 years 40%
At least 4 years 60%
At least 5 years 80%
At least 6 years or more 100%
The vesting provisions of Section 6.1(b), rather than the top-heavy
vesting provisions of this Section, will apply to any Member who does not
perform an Hour of Service after the Plan becomes Top-Heavy.
2 INCLUDED YEARS OF SERVICE - VESTING. For purposes of determining
"Years of Service" with respect to vesting, the Plan takes into account
all Years of Service an Employee completes with the Company or an
Affiliate except:
(a) For the sole purpose of determining a Member's nonforfeitable
percentage of the Member's Account which accrued for the Member's benefit
prior to a Forfeiture Break in Service, the Plan disregards any Year of
Service after the Member first incurs a Forfeiture Break of Service.
(b) Any Year of Service before the Member attained the age of 18.
(c) Any Year of Service during the period the Company did not maintain
this Plan or a predecessor plan.
(d) In the case of a Member who is 0% vested in the Member's Account at
the time the Member has a Break in Service, any Year of Service before a
Break in Service if the number of consecutive Breaks in Service equals or
exceeds the greater of 5 or the aggregate number of the Years of Service
prior to the Break in Service.
(e) In the case of any Member who has a 1 year Break in Service, no
Year of Service before such break shall be taken into account until the
Member completes a Year of Service after the Member's re-employment.
3 NORMAL RETIREMENT. Notwithstanding the vesting schedule in Section
6.01, a Member's Account is one hundred percent (100%) nonforfeitable upon
and after attaining the Normal Retirement Age if the Member is an Employee
on or after that date. An Employee may terminate the Member's employment
and retire for the purposes hereof upon the Member's Normal Retirement
Date, and all amounts credited to such Member's Account shall be paid to
him as set forth in Article 7. If a Member continues as an Employee after
the Member's Normal Retirement Date, the Member shall continue to be
treated in all respects as a Member until the Member's actual retirement.
4 DISABILITY. A Member's Account will be one hundred percent (100%)
nonforfeitable if the Member's Termination of Service is a result of the
Member's Disability.
5 DEATH. A Member's Account will be one hundred percent (100%)
nonforfeitable upon the Member's death.
6 DISTRIBUTION TO PARTIALLY-VESTED MEMBER. If pursuant to Article 7,
a partially-vested Member receives a distribution of the entire amount of
the Member's vested Account before the Member incurs a Forfeiture Break in
Service, the distribution will result in an immediate forfeiture of the
nonvested portion of the Member's Account.
7 RESTORATION OF FORFEITED ACCOUNT BALANCE UPON RE-EMPLOYMENT.
(a) A partially-vested Member who is re-employed as an Employee after
receiving a distribution of the entire amount of the Member's vested
Account may repay to the Trustee the amount of the distribution
attributable to the Member's Profit Sharing and Matching Subaccounts
unless the Member no longer has a right to restoration because:
(1) Five (5) years have elapsed since the Member's first
re-employment date as an Employee following the cash-out distribution;
or
(2) The Member incurred a Forfeiture Break in Service.
If a partially-vested Member makes the distribution repayment, the
Committee must restore the Member's Profit Sharing and Matching
Subaccounts to the same dollar amount as the dollar amount of the Member's
Profit Sharing and Matching Subaccounts on the Valuation Date immediately
preceding the date of the cash-out distribution, unadjusted for any gains
or losses occurring subsequent to that Valuation Date. Restoration of the
Member's Profit Sharing and Matching Subaccounts includes restoration of
all Code <section> 411(d)(6) protected benefits with respect to the
restored Profit Sharing and Matching Subaccounts in accordance with
applicable Regulations.
(b) The Committee will restore the Profit Sharing and Matching
Subaccounts as of the Valuation Date coinciding with or immediately
following the repayment. To restore the Member's subaccounts, the
Committee, to the extent necessary, will allocate to the Member's
subaccounts:
(1) The amount, if any, of Member forfeitures the Committee would
otherwise allocate under Section 5.1(a);
(2) The amount, if any, of the Trust Fund net income or gain for
the Plan Year; and
(3) The Company Profit Sharing Contributions and special
contributions from the Company for the purpose of restoration.
8 ZERO PERCENT (0%) VESTED MEMBER. A Member who is zero percent
vested in the Member's Profit Sharing and Matching Subaccounts on the date
of such Member's Termination of Service shall be deemed to have received a
distribution of the entire non-forfeitable balance in such Subaccounts on
the date of such Termination of Service. For purposes of applying the
restoration provisions of Section 6.7, the Committee will treat the zero
percent vested Member as repaying the Member's deemed distribution on the
first date of the Member's re-employment as an Employee.
9 SEGREGATED ACCOUNTS.
(a) Segregated Accounts for Repaid Amount. Until the Committee
restores the Member's Profit Sharing and Matching Subaccounts, as
described in Section 6.7, the Trustee will invest the cash-out amount the
Member has repaid in segregated subaccounts maintained solely for that
Member. The Trustee must invest the amount in the Member's segregated
subaccounts in Federally insured interest bearing savings account(s) or
time deposit(s) (or a combination of both), or in other fixed income
investments. Until commingled with the balance of the Trust Fund on the
date the Committee restores the Member's Profit Sharing and Matching
Subaccounts, the Member's segregated subaccounts remain a part of the
Trust, but it alone shares in any income it earns and it alone bears any
expense or loss it incurs. Unless the repayment qualifies as a Rollover
Contribution, the Committee will direct the Trustee to repay to the Member
as soon as is administratively practicable the full amount of the Member's
segregated subaccounts if the Committee determines the Member does not
have the right to have the Members accounts restored pursuant to Section
6.7.
(b) Segregated Accounts for Pre-Forfeiture Break in Service Accounts.
If a Member re-enters the Plan subsequent to incurring a Forfeiture Break
in Service, the Trustee must maintain separate subaccounts for the
Member's pre-Forfeiture Break in Service Profit Sharing and Matching
Subaccounts, unless the Member is 100% vested in the Member's pre-
Forfeiture Profit Sharing and Matching Subaccounts.
10 FORFEITURE OCCURS. A Member's forfeiture, if any, of the Member's
Profit Sharing and Matching Subaccounts occurs under the Plan on the
earlier of:
(a) The last day of the Plan Year in which the Member first incurs a
Forfeiture Break in Service; or
(b) The day on which the entire vested portion of the Member's Profit
Sharing and Matching Subaccounts is distributed or deemed to be
distributed as provided in Section 6.8.
A Member does not forfeit any portion of the Member's Profit Sharing or
Matching Subaccounts for any other reason or cause except as expressly
provided by this Section 6.10 or as provided under Section 17.6.
11 DISTRIBUTION FOLLOWING HARDSHIP WITHDRAWAL OR LOAN. Any Member who
has received a hardship withdrawal under Article X or a loan under
Article XI that has not been repaid under Section 11.7 and who thereafter
has a Termination of Service will be entitled to a vested benefit in the
Member's Account calculated pursuant to Treasury Regulation
Section 1.411(a)-7(d)(5)(iii)(B) or any successor Treasury Regulation
thereto.
12 AMENDMENT TO VESTING SCHEDULE. Though the Company reserves the
right to amend the vesting schedule at any time, the Committee will not
apply the amended vesting schedule to reduce the nonforfeitable percentage
of any Member's Profit Sharing and Matching Subaccounts as of the later of
the date the Company adopts the amendment, or the date the amendment
becomes effective) to a percentage less than the nonforfeitable percentage
computed under the Plan without regard to the amendment. An amended
vesting schedule will apply to a Member only if the Member receives credit
for at least one Hour of Service after the new schedule becomes effective.
If the Company makes a permissible amendment to the vesting schedule, each
Member having at least three (3) Years of Service with the Employer may
elect to have the percentage of the Member's nonforfeitable Profit Sharing
and Matching Subaccounts computed under the Plan without regard to the
amendment. The Member must file the Member's election with the
Administrator within sixty (60) days of the latest of (a) the Company's
adoption of the amendment; (b) the effective date of the amendment; or (c)
the Member's receipt of a copy of the amendment. The Administrator, as
soon as practicable, must forward a true copy of any amendment to the
vesting schedule to each affected Member, together with an explanation of
the effect of the amendment, the appropriate form upon which the Member
may make an election to remain under the vesting schedule provided under
the Plan prior to the amendment and notice of the time within which the
Member must make an election to remain under the prior vesting schedule.
The election described in this Section 6.11 does not apply to a Member if
the amended vesting schedule provides for vesting at least as rapid at all
times as the vesting schedule in effect prior to the amendment. For
purposes of this Section 6.11, an amendment to the vesting schedule
includes any Plan amendment which directly or indirectly affects the
computation of the nonforfeitable percentage of an Employee's rights to
the Member's Profit Sharing and Matching Subaccounts. Furthermore, the
Committee must treat any shift in the vesting schedule, due to a change in
the Plan's top-heavy status, as an amendment to the vesting schedule for
purposes of this Section 6.11.
ARTICLE VII. PAYMENT OF BENEFITS
1 ENTITLEMENT. Upon a Member's Termination of Service, such Member,
or in the event of such Member's death, such Member's Beneficiary, shall
become entitled to such Member's Accrued Benefit. In the event the Member
dies after Termination of Service but prior to payment of such Member's
benefit, such Member's Accrued Benefit shall be paid to such Member's
Beneficiary.
2 METHOD OF DISTRIBUTION. Subject to Section 7.3(a), distribution of
a Member's Accrued Benefit shall be made in one single sum from the Trust
Fund.
3 BENEFIT COMMENCEMENT. The payment of the Accrued Benefit to which
a Member, or, in the event of the Member's death, such Member's
Beneficiary, is entitled shall be made as soon as practicable after such
Member incurs a Termination of Service; provided, however, in no event
shall the payment be made more than 60 days after the end of the calendar
month in which the Member incurs the later of the Member's Termination of
Service or the date the Administrator receives satisfactory evidence of
the Member's death or Disability, if applicable. Notwithstanding the
foregoing, the following special rules shall apply:
(a) If such Member has not reached age 65 and such Member's Accrued
Benefit is more than $3,500, accelerated distribution may not be made
without such Member's consent. If the Member does not consent to
distribution prior to attaining age 65, then distribution shall be made as
soon as practicable after the close of the Plan Year in which such Member
attains age 65, but in no event later than 60 days following the close of
such Plan Year.
(b) In no event shall distribution of a Member's Accrued Benefit be
made later than the April 1 next following the calendar year in which the
Member attains age 70 1/2 .
(c) Distribution may be made to an alternate payee under a qualified
domestic relations order prior to the Member's attainment of earliest
retirement age (as defined under Code <section> 414(p)) only if: (1) the
order either specifically allows distribution prior to that time or
permits the Plan and the alternate payee to authorize an earlier
distribution; and (2) if the amount of the alternate payee's benefit under
the Plan exceeds $3,500 and the order requires consent to the
distribution, that the alternate payee consents to the timing of the
distribution.
4 ROLLOVERS.
(a) For purposes of this Article VII and as otherwise used in this
Plan, the following terms shall have the meaning set forth below.
(1) "Distributee" shall mean a Member, former Employee, the
Member's or former Employee's spouse or former spouse who is the
alternate payee under a Qualified Domestic Relations Order, as defined
in section 414(p)(8) of the Code, and the surviving spouse of a Member
or former Employee.
(2) "Eligible Rollover Distribution" shall mean any distribution
of all or any portion of the balance of the Distributee's Account,
except that an Eligible Rollover Distribution does not include: any
distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint life
expectancies) of the Distributee and the Distributee's designated
beneficiary, or for a specified period of 10 years or more; any
distribution to the extent such distribution is required under section
401(a)(9) of the Code; and the portion of any distribution that is not
includable in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to employer securities
pursuant to Section 402(e)(4)).
(3) "Eligible Retirement Plan" shall mean an Individual Retirement
Account described in section 408(a) of the Code, an Annuity Plan
described in section 403(a) of the Code, an Individual Retirement
Annuity described in Section 408(b) (other than an endowment contract),
or a Qualified Trust, described in section 401(a) of the Code. 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.
(b) Notwithstanding any provision of the Plan to the contrary, a
Distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan.
(c) The Committee may prescribe reasonable procedures for a distributee
to elect a Direct Rollover pursuant to this Section, and may require that
the Distributee provide such information and documentation as may be
reasonably necessary to accomplish a Direct Rollover. The Administrator
shall not be required to execute a Direct Rollover of a portion of the
balance to the credit of the Distributee if such portion is not equal to
at least $500. The Administrator shall not be required to execute a
Direct Rollover with respect to Eligible Rollover Distributions of a
Distributee during a year that are reasonably expected to total less than
$200. Furthermore, the Administrator shall not be required to divide an
Eligible Rollover Distribution with respect to a Distributee into separate
distributions to be paid to two or more Eligible Retirement Plans in
Direct Rollovers.
(d) A Distributee who fails to make an affirmative election under this
Section shall be treated as having not made an election for a Direct
Rollover, provided the Distributee has received a written explanation of
the Direct Rollover option within a reasonable time before the Eligible
Rollover Distribution. In such event, the Committee shall make
distributions in accordance with the provisions of Article VII.
5 MEDIUM OF PAYMENT. Distribution of a Member's Accrued Benefit
shall be made entirely in cash; provided, however, that distribution of a
Member's PAYSOP Subaccount shall be made entirely in whole Shares, with
the value of any fractional interest in Shares paid in cash, unless the
Member elects to receive such amounts in cash, in which case the Shares
allocated to the Member's PAYSOP Subaccount immediately prior to the date
of distribution shall be converted to cash and the amount that the Member
shall receive is the fair market value of the Shares as of the date the
Shares are converted to cash. Notwithstanding the foregoing, the Member
shall receive an in-kind distribution of any life insurance policy
allocated to such Member's Account, unless such Member elects to have the
policy converted into cash.
6 APPLICABLE VALUATION DATE. The Accrued Benefit to be distributed
pursuant to this Article VII, excluding any Shares and life insurance
contracts specifically allocated to the Member's Account which the Member
does not elect to receive in cash, shall be based upon the value of the
Member's Account as of the Valuation Date immediately following the
Member's Termination of Service, adjusted for contributions to and
distributions from the Member's Account after that date and before the
date of distribution. Distributions required in connection with
contributions allocated after the distribution of a Member's Account shall
be made as soon as administratively practicable.
7 DISTRIBUTION OF PAYSOP SUBACCOUNT. Notwithstanding any provision
of the Plan to the contrary, in no event shall any distribution of a
Member's PAYSOP Subaccount be made before the end of the 84th month
beginning after the month in which the Shares were originally allocated to
the Member's account, except in accordance with Code Section 409(d).
8 LIMITATION ON DISTRIBUTIONS. Notwithstanding any other provisions
of this Plan, any distribution from this Plan shall be made in accordance
with the requirements of Code Section 401(a)(9) and Regulations
promulgated under that Section, and such requirements shall take
precedence over any contrary provisions in this Plan.
9 BENEFITS SUBJECT TO INSURANCE CONTRACT. If the payment of any
benefit under the Plan is provided for by a contract with an insurance
company, the payment of such benefit shall also be subject to all the
provisions of such contract.
ARTICLE VIII. MAXIMUM ACCOUNT ADDITIONS
1 APPLICATION. The provisions of this Article VIII shall govern
notwithstanding any other provisions of the Plan.
2 DEFINITIONS. For purposes of this Article and as otherwise used in
this Plan, the following terms shall have the meaning set forth below.
(a) "Annual Addition" shall mean the following amounts which, without
regard to this Article, are to be credited to the Member's Account for any
Limitation Year: (1) Company contributions, including Before-Tax
Contributions, Matching Contributions and Profit Sharing Contributions and
(2) such other amounts as may be required to be included under the Code
Section 415 and the Regulations thereunder. "Annual Addition" shall not
include, without limitation, Rollover Contributions.
(b) "Limitation Year" shall mean the 12-month period beginning January
1 and ending the next following December 31.
(c) "415 Compensation" shall mean, as to each Employee, the total
compensation from the Company, including overtime and bonuses, which is
paid to an Employee. For purposes of applying the limitations under Code
Section 404(a), 415 and 416, "415 Compensation" shall include: wages,
salaries, fees for professional services and other amounts received for
services actually rendered in the course of employment with the Company
(including, but not limited to, commissions paid salesmen, compensation
for services on the basis of a percentage of profits, commissions on
insurance premiums, tips and bonuses) paid during the Limitation Year and
shall exclude: (1)(A) Company contributions to a deferred compensation
plan which are not includable in the Employee's gross income for the
taxable year in which contributed, (B) Company contributions made on
behalf of the Employee to a simplified employee pension plan to the extent
such contributions are deductible from the Employee's gross income,
(C) any distribution from a plan of deferred compensation, regardless of
whether such amounts are includable in the gross income of the Employee
when distributed, except however, any amounts received by an Employee
pursuant to an unfunded nonqualified plan to the extent such amounts are
includable in the gross income of the Employee; (2) amounts realized from
the exercise of a nonqualified stock option, or amounts realized when
restricted stock (or property) held by an Employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture;
(3) amounts realized from the sale, exchange, or other disposition of
stock acquired under a qualified stock option; and (4) other amounts which
receive special tax benefits, such as premiums for group term life
insurance (but only to the extent that the premiums are not includable in
the gross income of the Employee), or contributions made by the Company
(whether or not under a salary reduction agreement) towards the purchase
of any annuity contract described in Code Section 403(b) (whether or not
the contributions are excludable from the Employee's gross income);
provided, however, 415 Compensation in excess of $200,000 (as such amount
may be adjusted for inflation from time to time for a Limitation Year
under Code Sections 401(a)(17) and 415(d)) in any Limitation Year shall be
disregarded.
(d) "Defined Benefit Plan Fraction" shall mean, as to any Member in any
Limitation Year, a fraction (1) the numerator of which is such Member's
projected annual benefit under a defined benefit plan maintained by the
Company and any other defined benefit plan required to be aggregated with
such plan under Code Section 415(f) (determined as of the end of the
Limitation Year), and (2) the denominator of which is the lesser of
(A) the product of 1.25 times $90,000 (as adjusted upward from time to
time pursuant to Code Section 415(d)), or (B) the product of 1.4 times 100
percent of such Member's highest average 415 Compensation for the
consecutive Limitation Years during which such person has been a Member of
this Plan or a participant in any other defined benefit plan sponsored by
the Company or for any 3 such consecutive Limitation Years, whichever
period is less.
(e) "Defined Contribution Plan Fraction" shall mean, as to any Member
in any Limitation Year, a fraction (1) the numerator of which is the sum
of all Annual Additions to such Member's Account, and all annual additions
(as defined in Code Section 415(c)(2)) to any account of such Member in
any other defined contribution plan required to be aggregated with this
Plan under Code Section 415(f), as of the close of such Limitation Year,
and (2) the denominator of which is the sum of the lesser of the following
amounts determined for such Limitation Year and for each prior Limitation
Year during which the Member was an Employee: (A) the product of 1.25
times $30,000 (or, if greater, one-fourth of the $90,000 limit under Code
Section 415(b)(1)(A) as adjusted upward from time to time for a Limitation
Year under Code Section 415(d)); or (B) the product of 1.4 times 25
percent of the Member's 415 Compensation for each such Limitation Year.
3 GENERAL RULES.
(a) The Annual Addition credited to a Member's Account for any
Limitation Year may not exceed the lesser of (1) $30,000 (or, if greater,
25 percent of the dollar limitation in effect under Section 415(b)(1)(A)
of the Code), or (2) 25 percent of the Member's 415 Compensation for the
Limitation Year.
(b) If a Member is also a participant or was a participant in one or
more defined benefit plans, the sum of such Member's Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction shall not exceed 1.0 for
each Limitation Year.
(c) For purposes of this Article VIII, all defined contribution plans
maintained by the Company and any Affiliate shall be treated as one plan
and all defined benefit plans maintained by the Company and any Affiliate
shall be treated as one plan, as provided in Code Section 415(f).
4 ORDER OF REDUCTION.
(a) Any adjustment required to satisfy the limitations set forth in
Code Section 415 as a result of a Member's participation in another
defined contribution plan or defined benefit plan, shall be made first to
this Plan and then to annual additions under any defined benefit plan
maintained by the Company.
(b) If the Committee determines that the allocation of contributions,
if any, to the Account of a Member will cause the Annual Addition for that
Member to exceed the limitations set forth in Section 8.3 and that an
adjustment under this Plan is required to satisfy Section 8.3, the excess
amounts shall be held unallocated in a suspense account for the Limitation
Year and allocated and reallocated in the next Limitation Year to all of
the Members of the Plan. The excess amounts must be used to reduce
Company contributions for the next Limitation Year (and succeeding
Limitation Years, as necessary) for all of the Members in the Plan. For
purposes of this Section, excess amounts may not be distributed to a
Member or former Member. If the allocation or reallocation of the excess
amounts in a later Limitation Year causes the limitations of Code Section
415 to be exceeded with respect to each Plan Member for the Limitation
Year, then these amounts must be held unallocated in the suspense account.
If the suspense account is in existence at any time during a particular
Limitation Year other than the Limitation Year described in the preceding
sentence, all amounts in the suspense account must be allocated and
reallocated to the Members' Accounts (subject to the limitations of Code
Section 415) before any Company contributions which would constitute
annual additions may be made to the Plan for that Limitation Year.
ARTICLE IX. SPECIAL DISCRIMINATION RULES
1 DEFINITIONS. For purposes of this Article and as otherwise used in
this Plan, the following terms shall have the meanings set forth below.
(a) "Actual Contribution Percentage" or "ACP" shall mean the ratio
(expressed as a percentage) of (1) the sum of the Matching Contributions
made on behalf of a Member for the Plan Year and, to the extent permitted
in Treasury Regulations and elected by the Company, the Member's Qualified
Elective Deferrals, to (2) the Member's 415 Compensation, as defined in
Section 8.2(c), for that period of the Plan Year for which such person is
a Member. The Company, on an annual basis, may elect to include or not to
include Qualified Elective Deferrals in computing the ACP for a Plan Year.
Furthermore, for any Plan Year in which the Plan is a Top Heavy Plan, the
Company may elect on an annual basis to count a Member's Matching
Contributions toward satisfying the required minimum contribution under
Section 12.4(a) (minimum contribution for non-key employees in a top-heavy
plan) in lieu of including such contributions in the ACP.
(b) "Actual Deferral Percentage" or "ADP" shall mean the ratio
(expressed as a percentage) of the sum of Before-Tax Contributions and
Supplemental Matching Contributions made for the Plan Year on behalf of an
Employee eligible to enroll in the Plan pursuant to Article II (excluding
any "Excess $7,000 Deferrals" by a "Non-highly Compensated Employee") to
the Member's 415 Compensation for that period of the Plan Year for which
such person is a Member.
(c) "Average Actual Contribution Percentage" shall mean the average
(expressed as a percentage) of the Actual Contribution Percentages of the
Members in a group. The percentage shall be rounded to the nearest one-
hundredth of one percent.
(d) "Average Actual Deferral Percentage" shall mean the average
(expressed as a percentage) of the Actual Deferral Percentages of such
Employees in a group. The percentage shall be rounded to the nearest one-
hundredth of one percent.
(e) "Combined ADP and ACP Test" shall have the meaning set forth in
Section 9.10.
(f) "Excess $7,000 Deferrals" shall have the meaning set forth in
Section 9.2.
(g) "Excess ACP Contributions" shall have the meaning set fort in
Section 9.8.
(h) "Excess ADP Deferrals" shall have the meaning set forth in Section
9.5.
(i) "Family Member" shall mean, with respect to any "Highly Compensated
Employee" who was a 5 percent or more owner of the Company or one of the
10 highest paid Highly Compensated Employees during the current Plan Year,
the Employee's spouse, a lineal ascendant or descendant, or a spouse of a
lineal ascendant or descendant.
(j) "Highly Compensated Employee" shall mean any Employee eligible to
participate in the Plan pursuant to Article II who, during the current or
prior Plan Year:
(1) was a 5 percent or more owner of the Company;
(2) received 415 Compensation from the Company or an Affiliate
in excess of $75,000 for the Plan Year;
(3) received 415 Compensation from the Company or an Affiliate
in excess of $50,000 for the Plan Year and was among the "top paid
group" (as defined in Code Section 414(q)) of Employees during the
Plan Year; or
(4) was an officer receiving 415 Compensation in excess
of 50 percent of the amount specified in Code Section
415(b)(1)(A) for the Plan Year. For this purpose no more than
50 Employees shall be deemed officers.
For purposes of the definition of "Highly Compensated Employee," the
$50,000 and $75,000 limitations referred to in this Section shall be
adjusted in the same manner as the limitations specified in Code Section
415(b)(1)(A). Finally, the term "Highly Compensated Employee" shall be
determined in accordance with Section 414(q) of the Code and Regulations
thereunder.
(k) "Maximum Combined Percentage" shall have the meaning set forth
in Section 9.10(b).
(l) "Non-highly Compensated Employee" shall mean an Employee
eligible to participate in the Plan pursuant to Article II who is
neither a Highly Compensated Employee nor a Family Member of a Highly
Compensated Employee.
(m) "Qualified Elective Deferrals" shall mean the Before-Tax
Contributions and Supplemental Matching Contributions made on behalf of
a Member and designated by the Committee as Qualified Elective
Deferrals, which satisfy the following requirements:
(1) the aggregate of all Before-Tax Contributions and
Supplemental Matching Contributions for the Plan Year, including the
Qualified Elective Deferrals, must satisfy the requirements of
Section 9.3(a);
(2) the Before-Tax Contributions and Supplemental Matching
Contributions for the Plan Year, excluding the Qualified Elective
deferrals, must satisfy the requirements of Section 9.3(a);
(3) if the Company elects to aggregate Qualified Elective
Deferrals with Matching Contributions in order to avoid Excess ACP
Contributions, such Qualified Elective Deferrals shall only be taken
into account to the extent necessary to satisfy the provisions of
Section 9.6(a)(2); and,
(4) Qualified Elective Deferrals must satisfy all other
provisions of this Plan applicable to Before-Tax Contributions and
Supplemental Matching Contributions, respectively, and shall remain
part of the Member's Before-Tax Subaccount and Supplemental
Subaccount, respectively. Nevertheless, except as provided in this
Section 9.1(m), Qualified Elective Deferrals shall be excluded in
determining whether any other contribution or benefit satisfies the
nondiscrimination requirements of Code Section 401(a)(4) and
401(k)(3).
2 LIMIT ON BEFORE-TAX CONTRIBUTIONS.
(a) Notwithstanding any other provision of the Plan to the
contrary, the aggregate of a Member's Before-Tax Contributions during a
calendar year may not exceed $7,000 (as adjusted upwards from time to
time pursuant to Code Section 415(d)). Any Before-Tax Contribution in
excess of the foregoing limits ("Excess $7,000 Deferral"), plus any
income and minus any loss allocable thereto, may be distributed to the
applicable Member no later than April 15 following the Plan Year in
which the Before-Tax Contributions were made.
(b) Any Member who has an Excess $7,000 Deferral during a calendar
year may receive a distribution of the Excess $7,000 Deferral plus any
income or minus any loss allocable thereto, provided (1) the Member
requests the distribution of the Excess $7,000 Deferral, (2) the
distribution occurs after the date the Excess $7,000 Deferral arose, and
(3) the Committee designates the distribution as a distribution of an
Excess $7,000 Deferral. A Member shall be deemed to have notified the
Committee of the Excess $7,000 Deferral if such Member has Excess $7,000
Deferrals for the Plan Year, taking into account Excess $7,000 Deferrals
under plans maintained by the Company or any Affiliates.
(c) If a Member makes a Before-Tax Contribution under this Plan and
in the same calendar year makes a contribution to any other Code Section
401(k) plan containing a cash or deferred arrangement, or a Code Section
408(k) plan (simplified employee pension plan) or Code Section 403(b)
plan (tax-sheltered annuity) and, after the return of any Excess $7,000
Deferral pursuant to Section 9.2(a) and (b), the aggregate of all such
Before-Tax Contributions and other such contributions exceeds the
limitations contained in Code Section 402(g), then such Member may
request that the Committee return all or a portion of the Member's
Before-Tax Contributions for the calendar year plus any income and minus
any loss allocable thereto. The amount by which such Before-Tax
Contributions and other such contributions exceed the Code Section
402(g) limitations will also be known as an Excess $7,000 Deferral. A
Member shall be deemed to have notified the Committee of the Excess
$7,000 Deferral if such Member has Excess $7,000 Deferrals for the Plan
Year, taking into account Excess $7,000 Deferrals under plans maintained
by the Company or any Affiliates.
(d) Any request for a return of Excess $7,000 Deferrals pursuant to
Section 9.2(c) must (1) be made in writing, (2) be submitted to the
Committee not later than the March 1 following the Plan Year in which
the Excess $7,000 Deferral arose, (3) specify the amount of the Excess
$7,000 Deferral, and (4) contain a statement that if the Excess $7,000
Deferral is not distributed, it will, when added to amounts deferred
under other plans or arrangements described in Sections 401(k), 408(k),
or 403(b) of the Code, exceed the limit imposed on the Member by Section
402(g) of the Code for the year in which the Excess $7,000 Deferral
occurred.
(e) Before-Tax Contributions may only be returned to the extent
necessary to eliminate a Member's Excess $7,000 Deferral. Excess $7,000
Deferrals shall be treated as Annual Additions under Article VIII of the
Plan. In no event shall the returned Excess $7,000 Deferrals for a
particular calendar year exceed the Member's aggregate Before-Tax
Contributions for such calendar year.
(f) The income or loss allocable to a Before-Tax Contribution that
is returned to a Member pursuant to Section 9.2(a) or (c) shall be
determined in the same manner as provided in Section 5.1.
(g) See Section 10.1(c) for circumstances under which a Member's
maximum annual Before-Tax Contribution could be reduced as a result of
such Member's receiving a hardship distribution.
3 ADP TEST.
(a) The Average Actual Deferral Percentage for Highly Compensated
Employees for each Plan Year and the Average Actual Deferral Percentage
for Non-highly Compensated Employees for the same Plan Year must satisfy
one of the following tests:
(1) The Average Actual Deferral Percentage for Members who are
Highly Compensated Employees for the Plan Year shall not exceed the
Average Actual Deferral Percentage for Members who are Non-highly
Compensated Employees for the Plan Year multiplied by 1.25; or
(2) The excess of the Average Actual Deferral Percentage for
Members who are Highly Compensated Employees for the Plan Year over
the Average Actual Deferral Percentage for Members who are Non-
highly Compensated Employees for the Plan Year is not more than 2
percentage points, and the Average Actual Deferral Percentage for
Members who are Highly Compensated Employees is not more than the
Average Actual Deferral Percentage for Members who are Non-highly
Compensated Employees multiplied by 2.
(b) The permitted disparity between the Average Actual Deferral
Percentage for Highly Compensated Employees and the Average Actual
Deferral Percentage for Non-highly Compensated Employees may be further
reduced as required by Section 9.10.
(c) If at any time during a Plan Year the Committee, as a result of
periodic testing for compliance with the provisions of Section 9.3(a),
determines that the Plan may not comply with such provisions as of the
end of such Plan Year, the Committee, in its discretion, may temporarily
suspend a Highly Compensated Employee's Deferral Election for all or a
portion of such remaining Plan Year and shall promptly notify the Member
of the suspension. If at the end of the Plan Year, the Plan does not
comply with the provisions of Section 9.3(a), the Company shall
distribute Before-Tax Contributions to certain Highly Compensated
Employees as provided in Section 9.5, except as otherwise provided in
the Code or in Treasury Regulations.
4 SPECIAL RULES FOR DETERMINING AVERAGE ACTUAL DEFERRAL
PERCENTAGE.
(a) The Actual Deferral Percentage for any Highly Compensated
Employee for the Plan Year who is eligible to have before-tax
contributions allocated to such person's account under 2 or more
arrangements described in Section 401(k) of the Code that are maintained
by the Company or an Affiliate shall be determined as if such before-tax
contributions were made under a single arrangement.
(b) If 2 or more plans maintained by the Company or an Affiliate
are treated as one plan for purposes of the nondiscrimination
requirements of Code Section 401(a)(4) or the coverage requirements of
Code Section 410(b) (other than for purposes of the average benefits
test), all before-tax contributions that are made pursuant to those
plans (other than an employee stock ownership plan within the meaning of
Code Section 4975(e)(7)) shall be treated as having been made pursuant
to one plan.
(c) For purposes of determining the ADP of a Highly Compensated
Employee who is either a 5 percent or more owner of the Company or one
of the 10 highest paid Highly Compensated Employees during the Plan
Year, the Before-Tax Contributions and 415 Compensation of such Member
shall include the Before-Tax Contributions and 415 Compensation of such
person's Family Members. Any person who is a Family Member shall not be
treated as a separate Employee in determining the Average Actual
Deferral Percentage for either Non-highly Compensated Employees or for
Highly Compensated Employees.
(d) The determination and treatment of Before-Tax Contributions and
the Actual Deferral Percentage of any Member shall be in accordance with
such other requirements as may be prescribed from time to time in
Treasury Regulations.
5 DISTRIBUTION OF EXCESS ADP DEFERRALS.
(a) Before-Tax Contributions exceeding the limitations of Section
9.3(a) ("Excess ADP Deferrals") and any income or loss allocable to such
Excess ADP Deferral shall be designated by the Committee as Excess ADP
Deferrals and shall be distributed to Highly Compensated Employees whose
Accounts were credited with Excess ADP Deferrals in the preceding Plan
Year. In determining the amount of Excess ADP Deferrals for each Highly
Compensated Employee, the Committee shall reduce the ADP for each Highly
Compensated Employee as follows:
(1) The ADP for the Highly Compensated Employee(s) with the
highest ADP will be reduced until equal to the second highest ADPs
under the Plan; then
(2) The ADP for the 2 (or more) Highly Compensated Employees
with the highest ADPs under the Plan will be reduced until equal to
the third highest ADP level under the Plan; then
(3) The steps described in (1) and (2) shall be repeated with
respect to the third and successive highest ADP levels under the
Plan until the Plan complies with one or both of the ADP tests
described in Section 9.3(a).
(b) To the extent administratively possible, the Committee shall
distribute all Excess ADP Deferrals and any income or loss allocable
thereto prior to March 15 following the end of the Plan Year in which
the Excess ADP Deferrals arose. In any event, however, the Excess ADP
Deferrals and any income or loss allocable thereto shall be distributed
prior to the end of the Plan Year following the Plan Year in which the
Excess ADP Deferrals arose. Excess ADP Deferrals shall be treated as
Annual Additions under Article VIII of the Plan.
(c) The income or loss allocable to Excess ADP Deferrals shall be
determined in the same manner as provided in Section 5.1.
(d) If an Excess $7,000 Deferral has been distributed to the Member
pursuant to Section 9.2(a) or (b), then any Excess ADP Deferral
allocable to such Member for the same Plan Year shall be reduced by the
amount of such Excess $7,000 Deferral.
(e) Distribution of Excess ADP Deferrals to Members described in
Section 9.4(c) shall be made in accordance with the provisions of
Treasury Regulation Section 1.401(k)-1(f)(4) or any successor Treasury
Regulation thereto.
6 ACP TEST.
(a) The Average Actual Contribution Percentage for Highly
Compensated Employees for each Plan Year and the Average Actual
Contribution Percentage for Non-highly Compensated Employees for the
same Plan Year must satisfy one of the following tests:
(1) The Average Actual Contribution Percentage for Members who
are High Compensated Employees for the Plan Year shall not exceed
the Average Actual Contribution Percentage for Members who are Non-
highly Compensated Employees for the Plan Year multiplied by 1.25;
or
(2) The excess of the Average Actual Contribution Percentage
for Members who are Highly Compensated Employees for the Plan Year
over the Average Actual Contribution Percentage for Members who are
Non-highly Compensated Employees for the Plan Year is not more than
2 percentage points, and the Average Actual Contribution Percentage
for Members who are Highly Compensated Employees is not more than
the Average Actual Contribution Percentage for Members who are Non-
highly Compensated Employees multiplied by 2.
(b) If at the end of the Plan Year, the Plan does not comply with
the provisions of Section 9.6(a), the Company may do any or all of the
following, except as otherwise provided in the Code Section or in
Treasury Regulations, in order to comply with such provision:
(1) The Company may aggregate Qualified Elective Deferrals of
Non-highly Compensated Employees with Matching Contributions of such
Members as provided in Section 9.1(a).
(2) In the case of a Matching Subaccount which does not comply
with Section 9.6(a), the Company may:
(A) Distribute vested Matching Contributions allocated to
the Matching Subaccounts of certain Highly Compensated
Employees as provided in Section 9.8;
(B) Forfeit nonvested Matching Contributions allocated to
the Matching Subaccounts of certain Highly Compensated
Employees as provided in Section 9.9.
7 SPECIAL RULES FOR DETERMINING AVERAGE ACTUAL CONTRIBUTION
PERCENTAGES.
(a) The Actual Contribution Percentage for any Highly Compensated
Employee for the Plan Year who is eligible to have matching
contributions or before-tax contributions allocated to such person's
account under 2 or more arrangements described in Section 401(a) or
401(k) of the Code that are maintained by a Company or an Affiliate
shall be determined as if such contributions were made under a single
arrangement.
(b) If 2 or more plans maintained by the Company or an Affiliate
are treated as one plan for purposes of the nondiscrimination
requirements of Code Section 401(a)(4) or the coverage requirements of
Code Section 410(b) (other than for purposes of the average benefits
test), all matching contributions that are made pursuant to those plans
(other than an employee stock ownership plan within the meaning of Code
Section 4975(e)(7)) shall be treated as having been made pursuant to one
plan.
(c) For purposes of determining the Actual Contribution Percentage
of a Highly Compensated Employee who is a 5 percent or more owner of a
Company or one of the 10 highest paid Highly Compensated Employees
during the Plan Year, the Matching Contributions and 415 Compensation of
such Member shall include all Matching contributions and 415
Compensation of Family Members. Family Members shall not be treated as
separate Employees for purposes of determining the Average Actual
Contribution Percentage for either Non-highly Compensated Employees or
for Highly Compensated Employees.
(d) The determination and treatment of Matching Contributions and
the Actual Contribution Percentage of any Member shall be in accordance
with such other requirements as may be prescribed from time to time in
Treasury Regulations.
8 DISTRIBUTION OF EXCESS ACP CONTRIBUTIONS.
(a) Matching Contributions allocated to a Matching Subaccount which
exceed the limitations of Section 9.6(a) ("Excess ACP Contributions")
and any income or loss allocable to such Excess ACP Contribution may be
designated by the Committee as "Excess ACP Contributions" and may be
distributed in the Plan Year following the Plan Year in which the Excess
ACP Contributions arose to those Highly Compensated Employees whose
Matching Subaccounts were credited with Excess ACP Contributions in the
preceding Plan Year. The amount of Excess ACP Contributions to be
distributed to a Highly Compensated Employee shall be determined using
the procedure described in Section 9.5(a).
(b) To the extent administratively possible, the Committee shall
distribute all Excess ACP Contributions and any income or loss allocable
thereto prior to March 15 following the end of the Plan Year in which
the Excess ACP Contributions arose. In any event, however, the Excess
ACP Contributions and any income or loss allocable thereto shall be
distributed prior to the end of the Plan Year following the Plan Year in
which the Excess ACP Contributions arose.
(c) Income or loss allocable to Excess ACP Contributions shall be
determined in the same manner that Net Investment Income (Loss) is
allocated as provided in Section 5.1(c).
(d) Amounts distributed to Highly Compensated Employees under this
Section 9.8 shall be treated as Annual Additions under Article VIII with
respect to the Employee who received such amount.
(e) Distribution of Excess ACP Contributions to Members described
in Section 9.7(c) shall be made in accordance with the provisions of
Treasury Regulation Section 1.401(m)(2)(iii) or any successor Treasury
Regulations thereto.
9 FORFEITURE OF EXCESS ACP CONTRIBUTIONS.
(a) Excess ACP Contributions, including any non-vested Matching
Contributions made to a Member's Account under Section 3.5 based upon
Before-Tax Contributions returned to a Member under Sections 9.5 or 9.8
(to the extent such non-vested Matching Contributions are not returned
to a Member under Section 9.6(b)), and any income or loss allocable to
such Excess ACP Contribution may be forfeited and used to reduce future
Matching Contributions as provided in Section 9.6(b)(3).
(b) The amount of any Excess ACP Contributions to be forfeited by a
particular Highly Compensated Employee shall be determined pursuant to
the procedure described in Section 9.5(a).
(c) The income or loss allocable to Excess ACP Contributions
allocated to a Member's Matching Subaccount shall be determined in the
same manner that Net Investment Income (Loss) is allocated as provided
in Section 5.1(c).
(d) Members described in Section 9.7(c) shall forfeit their Excess
Contributions in accordance with Treasury Regulation Section 1.401(m)-
1(e)(2)(iii) or any successor Treasury Regulation thereto.
(e) Amounts forfeited by Highly Compensated Employees under this
Section shall not be treated as Annual Additions under Article VIII with
respect to the Employee who forfeited such amount.
(f) Notwithstanding anything to the contrary contained herein,
vested Matching Contributions may not be forfeited to correct an Excess
ACP Contribution.
10 COMBINED ACP AND ADP TEST.
(a) The Plan must satisfy the "Combined ACP and ADP Test" described
in this Section 9.10 if (1) the Average Actual Deferral Percentage of
the Highly Compensated Employees exceeds 125 percent of the Average
Actual Deferral Percentage of the Non-highly Compensated Employees and
(2) the Average Actual Contribution Percentage of the Highly Compensated
Employees exceeds 125 percent of the Average Actual Contribution
Percentage of the Non-highly Compensated Employees.
(b) The Combined ACP and ADP Test is satisfied if the sum of the
Highly Compensated Employees' Average Actual Deferral Percentage and
Average Actual Contribution Percentage is equal to or less than the
"Maximum Combined Percentage" defined in paragraph (c) below.
(c) The "Maximum Combined Percentage" shall be determined by
adjusting the Non-highly Compensated Employees' Average Actual Deferral
Percentage and Average Actual Contribution Percentage in the following
manner:
(1) the greater of the two percentages shall be multiplied by
1.25, and
(2) the lesser of the two percentages shall be increased by 2
percentage points; however, in no event shall such adjusted
percentage exceed twice the original percentage.
The sum of (1) and (2) shall be the Maximum Combined Percentage.
(d) In the event the Plan does not satisfy the Combined ADP and ACP
Test, the Highly Compensated Employees' Average Actual Deferral
Percentage shall be decreased by distributing Before-Tax Contributions
to certain Highly Compensated Employees using the procedures described
in Section 9.5 until the sum of such percentage and the Highly
Compensated Employees' Average Actual Contribution Percentage equals the
Maximum Combined Percentage.
(e) The Highly Compensated Employees' Average Actual Contribution
Percentage shall not be reduced in order to satisfy the Combined ADP and
ACP Test.
(f) In addition to returning Elective Deferrals to certain Highly
Compensated Employees in order to satisfy the Combined ADP and ACP Test,
income or loss allocable to such Before-Tax Contributions shall also be
distributed.
(g) To the extent administratively possible, the Committee shall
distribute the Before-Tax Contributions and allocable income or loss
prior to March 15 following the end of the Plan Year for which the
Combined ADP and ACP Test is computed. In any event, however, such
Before-Tax Contributions and allocable income or loss shall be
distributed by the end of the Plan Year following the Plan Year for
which the Combined ADP and ACP Test is computed. Before-Tax
Contributions that are distributed pursuant to this Section 9.10 shall
be treated as Annual Additions under Article VIII of the Plan.
(h) This income or loss allocable to returned Before-Tax
Contributions shall be determined using the same procedures described in
Section 9.5(c).
(i) To the extent the provisions of this Section 9.10 conflict with
the requirements of Treasury Regulation Section 1.401(m)-2 or any
successor Regulation thereto, the provisions of such Treasury Regulation
shall prevail.
11 ORDER OF APPLYING CERTAIN SECTIONS OF ARTICLE. In applying
the provisions of this Article IX, the determination and distribution of
Excess $7,000 Deferrals shall be made first (to the extent possible) and
the determination, elimination of Excess ADP Deferrals shall be made
second, the determination and elimination of Excess ACP Contributions
shall be made third and finally the determination and any necessary
adjustment related to the combined ADP and ACP Test shall be made.
ARTICLE X. IN-SERVICE WITHDRAWALS
1 HARDSHIP WITHDRAWALS.
(a) If a Member incurs a financial hardship, such Member may
withdraw, prior to attaining age 59 1/2 , all or a portion of the amount
of such Member's vested: 1) Rollover Subaccount; 2) Before-Tax
Subaccount, provided that the earnings allocated to the Before-Tax
Subaccount after December 31, 1988, shall not be distributed under this
Section; and 3) all or a portion of the nonforfeitable Matching and
Profit Sharing Subaccounts; provided, however, in no event may a Member
withdraw any amount of such Member's Account which is pledged as
security for a loan pursuant to Section 11.5. In no event shall a
hardship distribution be made from a Member's PAYSOP Subaccount or
Supplemental Subaccount. A Member shall apply for a hardship withdrawal
on the form provided by the Administrator for such purpose, including
the effective date of the withdrawal which must be at least 15 days
prior to the date the form is filed with the Administrator. A request
for withdrawal may not be made more than 4 times during each Plan Year.
(b) For purposes of this Section 10.1, a financial hardship shall
mean an immediate and heavy financial need experienced by reason of
(1) medical expenses, as described in Code Section 213(d), previously
incurred by the Member, such Member's spouse or any of such Member's
dependents, as defined in Code Section 152; (2) purchase of the Member's
principal residence (other than to make mortgage payments, except as
provided under Section 10.1(b)(4); (3) payment of tuition for the next
12 months of post-secondary education for the Member, such Member's
spouse, children or other dependents, as defined in Code Section 152;
(4) preventing the eviction of the Member from such Member's principal
residence or foreclosure on the mortgage on such residence; or (5) any
other such needs identified by the Commissioner of the IRS and announced
in a publication generally applicable to all taxpayers.
(c) A withdrawal distribution based upon financial hardship cannot
exceed the amount required to meet the immediate financial need created
by the hardship, including the amount of any federal, state or local
income taxes or penalties applicable to the amount of the distribution,
and not reasonably available from other resources of the Member. In
order to ensure compliance with the provisions of this Section 10.1 and
Code Section 401(k) and the Regulations thereunder, the Committee may
require the Member to satisfy any or all of the provisions described in
subsections (1)-(4) below as a condition precedent to receiving a
hardship distribution:
(1) Certification by the Member on the form provided by the
Administrator for such purpose that the financial need cannot be
relieved (A) through reimbursement or compensation by insurance or
otherwise; (B) by reasonable liquidation of the Member's assets; (C)
by cessation of Before-Tax Contributions under the Plan; (D) by
other distributions or nontaxable loans from the Plan or other plans
maintained by the Company or any Affiliate, or any other employer,
or by borrowing from commercial sources on reasonable commercial
terms.
(2) Receipt by the Member of all distributions and nontaxable
loans that such Member is eligible to receive under this Plan and
under any other plan maintained by the Company or an Affiliate.
(3) Automatic suspension of Before-Tax Contributions beginning
on the first payroll period that commences after the date such
Member receives the withdrawal. Before-Tax Contributions on behalf
of such Member may be resumed only after the expiration of at least
12 months from the effective date of the suspension and only after
the Member files a new Deferral Election with the Administrator. In
addition, the maximum Before-Tax Contributions under Section 9.2
that can be made on behalf of a Member for the calendar year
following a hardship distribution shall be reduced by the amount of
Before-Tax Contributions made on behalf of the Member during the
calendar year in which the hardship distribution was made.
(4) Any other condition or method approved by the IRS.
(d) Upon direction by the Committee, the Trustee shall pay the
amount withdrawn on the effective date specified by the Member. For
purposes of the withdrawal, the Member's Account shall be valued as of
the Valuation Date immediately preceding the effective date of the
withdrawal, adjusted for withdrawals and distributions after such date.
Withdrawals shall be charged against a Member's subaccounts in the
following sequence: (1) Rollover Subaccount; (2) Before-Tax Subaccount,
but excluding earnings accrued thereon after December 31, 1988; (3)
nonforfeitable portion of the Matching Subaccount; and (4)
nonforfeitable portion of the Profit Sharing Subaccount. The reduction
in each subaccount shall be charged against the Investment Funds in
which the subaccount is invested on a pro rata basis.
(e) The Committee shall be permitted to rely reasonably upon the
representations of the Member of such Member's financial affairs and
shall not be required to conduct an independent investigation of such
representations. Approval of any withdrawal shall be made in an
objective and nondiscriminatory manner by the Committee based only upon
a determination that all relevant facts and circumstances presented by
the Member or discovered by the Committee satisfy the requirements of
both Section 10.1(b) and (c). No other method of approving withdrawals
shall be allowed.
2 WITHDRAWALS AFTER AGE 59-1/2. After reaching age 59 1/2 , a
Member who has been enrolled in the Plan for at least 5 years may
withdraw all or a portion of the amount in such Member's Before-Tax
Subaccount. In addition, a Member who has attained age 59 1/2 but has
been enrolled in the Plan for less than 5 years may withdraw all or a
portion of the amount in the Member's Before-Tax Subaccount that has
been deposited in the Trust Fund for at least 2 years. In no event,
however, may a Member withdraw any amount of such Member's Before-Tax
Subaccount which is pledged as security for a loan pursuant to Section
11.5. Withdrawals may be made pursuant to this Section 10.2 without
regard to the restrictions of Section 10.1, except that a Member must
meet the notice requirements under Section 10.1(a). The withdrawal
shall be taken on a pro rata basis from each Investment Fund in which
the Member's Before-Tax Subaccount is invested.
3 WITHDRAWALS FROM ROLLOVER SUBACCOUNT. A Member may withdraw
all or a portion of the amount in such Member's Rollover Subaccount that
has been deposited in the Trust Fund for at least two years. In
addition, a Member who has completed 60 months of participation may
withdraw all or a portion of the amount in such Member's Rollover
Subaccount. In no event, however, may a Member withdraw any amount
which is pledged as security for a loan pursuant to Section 11.5. In
order to make such withdrawal, a Member must meet the notice
requirements under Section 10.1(a). The withdrawal shall be taken on a
pro rata basis from each Investment Fund in which the Member's Rollover
Subaccount is invested.
ARTICLE XI. LOANS
1 AUTHORITY. The Committee shall have the discretion to direct
the Trustee to loan money to a Member who is an Employee, a Member who
is a former Employee (if such Member is a party in interest, as defined
in Section 3(14) of ERISA, with respect to the Plan), the Beneficiary of
a deceased Member or an alternate payee under a Qualified Domestic
Relations Order as defined in Section 17.5 (hereinafter referred to in
this Article XI as the "Applicant".) Each such loan shall be treated as
an investment of the Applicant's Account.
2 LOAN APPLICATION. An Applicant who wishes to borrow money
from the Plan shall file a written loan application with the Committee
on the form provided by the Committee for such purpose. The Committee,
in the exercise of its sole discretion, shall approve the loan if the
Committee determines that the loan will not constitute a taxable
distribution from the Plan and, if the Applicant is an Employee, such
Applicant has agreed to repay the loan through payroll deduction. In
exercising its discretion to approve or deny loans, the Committee shall
make loans to all Applicants on a reasonably equivalent basis and shall
not make loans to Highly Compensated Employees, officers, or
shareholders in an amount greater than the amount made available to
other Applicants.
3 CLAIMS PROCEDURE. Loans from the Plan that are denied, except
for the denial of a loan for less than $1,000 under Section 11.4(b),
shall be processed by the Loan Administrator in accordance with the
claims procedure in Section 14.7 of the Plan.
4 LOAN LIMITS.
(a) Loans made pursuant to this Article XI shall be limited to the
lesser of: (1) $50,000 reduced by the highest outstanding loan balance
during the one-year period ending on the day before the loan is made, or
(2) one-half of the Applicant's non-forfeitable Accrued Benefit as
determined under Article V as of the Valuation Date immediately
preceding the filing of the Applicant's loan application; provided,
however, in no event shall a loan exceed the value of the Applicant's
non-forfeitable Accrued Benefit excluding the Applicant's PAYSOP
Subaccount and any portion of the Applicant's non-forfeitable Accrued
Benefit which is invested in life insurance. For purposes of this
Section 11.4, all loans from all plans of the Company or any Affiliate
shall be aggregated. In addition, the Committee may further limit the
amount loaned to any Applicant in order to maintain a reserve chargeable
against the Applicant's Account for income taxes which would have to be
withheld by the Trustee if the loan becomes a deemed distribution to the
Applicant. Any such taxes required to be withheld by the Trustee
(whether or not such reserve has been created) shall be charged to and
reduce the Applicant's Account to the extent possible, and any excess
shall be treated as an administrative expense of the Plan which shall be
reimbursed by such Applicant.
(b) In no event shall a loan be made for less than $1,000.
(c) An Applicant shall not be granted more than one loan per year,
and an Applicant may not borrow from the Plan if such Applicant has
another outstanding loan from the Plan.
5 ADEQUATE SECURITY. Loans shall be adequately secured by the
Applicant's Account and supported by the Applicant's collateral
promissory note for the amount of the loan, made payable to the Trustee;
provided, however, no more than 50 percent of the Applicant's Account,
determined immediately after the origination of the loan, may be pledged
as security for such loan.
6 INTEREST RATE. Loans shall bear interest at a rate determined
by the Committee which is commensurate with the interest rate charged by
persons in the business of lending money for loans made under similar
circumstances. In making such determination, the Committee shall
consider rates charged by commercial lenders in the region in which the
Applicant is located for similar loans, such as secured personal loans,
car loans or home equity loans.
7 REPAYMENT.
(a) Each loan shall be evidenced by a written note, payable to the
Trustee, providing for level amortization with not less than monthly
payments over a fixed period not to exceed 5 years. However, loans used
to acquire any dwelling unit which, within a reasonable time, is to be
used (determined at the time the loan is made) as a principal residence
of the Applicant shall provide for periodic repayment over a reasonable
period of time that may exceed 5 years. Notwithstanding the foregoing,
loans made prior to January 1, 1987 which are used to acquire,
construct, reconstruct or substantially rehabilitate any dwelling unit
which, within a reasonable period of time is to be used (determined at
the time the loan is made) as a principal residence of the Applicant or
a member of such Applicant's family (within the meaning of Code Section
267(c)(4)) may provide for periodic repayment over a reasonable period
of time that may exceed 5 years. The repayment period for each loan
shall be determined by the Administrator in a uniform and
nondiscriminatory manner.
(b) Loans to an Applicant who is an Employee must be repaid by
payroll deduction. Payroll deductions will continue until the earlier
of the date the loan is repaid or the date the Applicant is entitled to
distribution under the terms of the Plan. If such an Applicant has a
Termination of Service and does not receive a distribution of such
Applicant's Account, then the loan shall be repaid in equal monthly
installments for the remaining term of the loan. If such deductions
from an Applicant's paychecks cease for any reason, then the loan shall
be repaid in equal monthly installments for the remaining term of the
loan or until the Applicant begins to receive paychecks in an amount
sufficient to cover the loan. If such an Applicant's paycheck is ever
insufficient to cover the amount of a loan payment, then such Applicant
shall pay the deficiency from outside funds.
(c) If on the date an Applicant's Account becomes payable pursuant
to Article VII of the Plan the Applicant has an outstanding loan
balance, then an amount equal to such loan amount together with accrued
interest shall be deemed immediately due and payable and if not paid
within 30 days, the unpaid balance of the loan will be reported to the
IRS as a distribution of the Account.
8 DEFAULT. An Applicant is not allowed to stop payroll
deductions for repayment of a loan prior to the Applicant's Termination
of Service. An Applicant who is not an Employee or who is no longer
making loan payments sufficient to cover the Applicant's loan payments
through payroll deduction or otherwise shall be in default on a loan if
such Applicant fails to make a loan payment, as determined by the
Administrator, before the date the next following loan payment becomes
due and payable, and the entire balance of the loan shall become
immediately due and payable; provided, however that in no event shall an
Applicant's Account be applied to repay the loan until the Applicant's
Account is otherwise payable under the terms of the Plan.
9 FORECLOSURE. If the entire balance of an Applicant's loan
becomes immediately due and payable under Section 11.8, the
Administrator shall foreclose, to the extent necessary, on the
collateral held as security for the Applicant's loan as soon as the
Applicant's Account becomes payable under the Plan. The Administrator
may, however, delay such foreclosure, provided the delay
(a) will not cause the Plan to lose any principal or interest, and
(b) the criteria for such delay are applied by the Administrator to
all similar loans on a reasonably equivalent basis.
10 WITHDRAWALS. As provided in Sections 10.1, 10.2 and 10.3, no
amount held as security for a loan may be withdrawn by an Applicant from
such Applicant's Account while a loan is outstanding, except that such
amounts which otherwise qualify for withdrawal other than on account of
hardship under Sections 10.2 and 10.3 may be withdrawn if immediately
applied to reduce such loan amount.
11 LOAN INVESTMENT. All loans under this Article XI shall be
treated as investments of the Trust. Loans shall be charged pro rata
against such Applicant's subaccounts (excluding the PAYSOP Subaccount).
Interest and principal repayment shall be added to such subaccounts as
provided in Section 4.5.
ARTICLE XII. TOP HEAVY PROVISIONS
1 APPLICATION. The provisions of this Article shall apply to
each Plan Year in which the Plan is Top Heavy and shall supersede any
conflicting provision of this Plan.
2 DEFINITIONS. For purposes of this Article and as otherwise
used in this Plan, the following terms shall have the meanings set forth
below.
(a) "Aggregation Group" means either a Required Aggregation Group
or a Permissive Aggregation Group as determined below:
(1) Each plan of the Company or an Affiliate in which a Key
Employee is a member in the Plan Year containing the Determination
Date or any of the 4 preceding Plan Years, and each other plan of
the Company or an Affiliate which enables any plan in which a Key
Employee participates to meet the requirements of Code Sections
401(a)(4) or 410, will be required to be aggregated. Such group
shall be known as a Required Aggregation Group. In the case of a
Required Aggregation Group, each plan in the group will be
considered Top Heavy if the Required Aggregation Group is a Top
Heavy Group. No plan in the Required Aggregation Group will be
considered Top Heavy if the Required Aggregation Group is not a Top
Heavy Group.
(2) The Company may also include any other plan not required
to be included in the Required Aggregation Group, provided the
resulting group, taken as a whole, would continue to satisfy the
provisions of Code Sections 401(a)(4) and 410. Such group shall be
known as a Permissive Aggregation Group. In the case of a
Permissive Aggregation Group, only a plan that is part of the
Required Aggregation Group will be considered Top Heavy if the
Permissive Aggregation Group is a Top Heavy Group. No plan in the
Permissive Aggregation Group will be considered Top Heavy if the
Permissive Aggregation Group is not a Top Heavy Group.
An Aggregation Group shall include any terminated plan of the
Company or an Affiliate if it was maintained within the last 5 years
ending on the Determination Date.
(b) "Determination Date" shall mean the last day of the Plan Year
immediately preceding the Plan Year for which Top Heavy status is
determined.
(c) "Key Employee" shall mean any Employee of the Company or
Beneficiary who, during the Plan Year or the 4 preceding Plan Years was
(1) an officer receiving 415 Compensation for the Plan Year in excess of
50 percent of the limit described in Code Section 415(b)(1)(A), (2) one
of the 10 Employees owning the largest interest in the Company or an
Affiliate and receiving 415 Compensation for the Plan Year equal to or
greater than the dollar limit described in Code Section 415(c)(1)(A),
(3) a greater than 5 percent owner of the Company, or (4) a greater than
one percent owner of the Company receiving 415 Compensation for the Plan
Year in excess of $150,000, or the Beneficiary of a Key Employee. The
Code Section 415(c)(1)(A) limits referred to in the preceding sentence
shall be the specified dollar limits plus any increases reflecting the
cost of living adjustments specified by the Secretary of the Treasury.
(d) "415 Compensation" shall have the meaning given such term in
Section 8.2(c) of the Plan.
(e) "Non-key Employee" shall mean any Member who is not a Key
Employee.
(f) "Top Heavy Group" shall mean an Aggregation Group in which, as
of the Determination Date, the sum of the present value of the
cumulative accrued benefits of Key Employees under all defined benefit
plans included in the group and the aggregate of the accounts of Key
Employees under all defined contribution plans included in the group
exceeds 60 percent of the sum of the present value of the cumulative
accrued benefits and the aggregate of the accounts of all Key and Non-
key Employees under all plans in the group.
3 DETERMINATION OF TOP HEAVY STATUS. The Plan shall be "Top
Heavy" for the Plan Year if, as of the Valuation Date which coincides
with or immediately precedes the Determination Date, the aggregate of
the Accounts of Key Employees under this Plan exceeds 60 percent of the
aggregate of the Accounts of all Key and Non-Key Employees under this
Plan; provided, however, if the Plan is a member of a Required
Aggregation Group, the Plan shall be Top Heavy for the Plan Year if the
Required Aggregation Group is a Top Heavy Group, unless the Plan is also
a member of a Permissive Aggregation Group that is not a Top Heavy
Group.
In determining the present value of the cumulative accrued benefit
or the amount of an account for an Employee for purposes of this Section
12.3 or Section 12.2(f), the following rules shall apply: All
distributions made during the 5-year period ending on the Determination
Date shall be included, as well as any distributions from any plan
terminated within the 5-year period ending on the Determination Date
that would have been a member of the Required Aggregation Group had it
not been terminated. In addition, for purposes of determining the
amount of an account for any Employee, any unallocated Company
contributions or forfeitures attributable to the Plan Year in which the
Determination Date falls shall also be included. The accrued benefit or
account of any Employee who was at one time a Key Employee but who was
not a Key Employee for any of the 5 Plan Years ending on the
Determination Date and any Employee who has not performed services for
the Company or an Affiliate maintaining a plan in the Aggregation Group
for the 5 Plan Years ending on the Determination Date, shall be
disregarded in determining Top Heavy status. For the purposes of this
subsection, the rollover subaccount maintained under any plan in the
Aggregation Group shall be included in the value of such Employee's
account, except to the extent that the Rollover Subaccount balance was
received in a transaction consummated after December 31, 1983 which was
initiated by the Employee and the amount received is attributable to a
distribution or transfer from the plan of an employer which is unrelated
to the Company or an Affiliate.
Solely for the purpose of determining if the Plan, or any other plan
included in the Required Aggregation Group, is Top Heavy, a Non-key
Employee's accrued benefit in a defined benefit plan shall be determined
under (A) the method, if any, that uniformly applies for accrual
purposes under all plans maintained by the Company and Affiliates, or
(B) if there is no such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under the fractional
accrual rate of Code Section 411(b)(1)(C).
4 MINIMUM CONTRIBUTION. Except as provided below, for any Plan
Year in which the Plan is Top Heavy, the contributions allocated on
behalf of any Non-key Employee who is an Employee on the Determination
Date shall not be less than the lesser of (a) 3 percent of such Non-key
Employee's 415 Compensation for such Plan Year, or (b) the largest
percentage of Matching, Profit Sharing, Before-Tax and Supplemental
Matching Contributions, as a percentage of the Key Employee's 415
Compensation for the Plan Year, allocated on behalf of any Key Employee
for such Plan Year. The minimum allocation shall be made even though,
under other Plan provisions, the Non-key Employee would not otherwise be
entitled to receive an allocation, or would have received a lesser
allocation, for the Plan Year because of the Non-key Employee's failure
to complete a Year of Service. In determining whether a Non-key
Employee has received the required minimum allocation, such Non-key
Employee's Before-Tax and Supplemental Matching Contributions and any
Matching Contributions used to satisfy the ACP Test for such Plan Year
shall not be taken into account. If a Non-key Employee participates in
this Plan and a defined benefit plan included in the Required
Aggregation Group, the minimum contribution and benefit requirements for
both plans in a Top Heavy Plan Year may be satisfied by an allocation of
contributions to the Account of each Non-key Employee in the amount of 5
percent of the Non-key Employee's 415 Compensation for the Plan Year.
No minimum allocation shall be required in this Plan for any Non-key
Employee who participates in this Plan and another defined contribution
plan that provides the minimum allocation and is included with this Plan
in a Required Aggregation Group. For the purpose of determining the
appropriate percentage under Section 12.4(b), all defined contribution
plans included in the Required Aggregation Group shall be treated as one
plan.
5 LIMITATIONS ON CONTRIBUTIONS. In any Plan Year in which the
Plan would be Top Heavy if "90 percent" were substituted for "60
percent" where it appears in Sections 12.2(f) and 12.3, "1.0" shall be
substituted for "1.25" as the multiplicand of the dollar limitation in
determining the denominator of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction set forth in Section 8.2(d) and (e)
of this Plan. In any Plan Year in which the Plan is Top Heavy but would
not be Top Heavy if "90 percent" were substituted for "60 percent" as
provided above, "1.0" shall be substituted for "1.25" as the
multiplicand of the dollar limitation in determining the denominator of
the Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction set forth in Section 8.2(d) and (e) of this Plan, unless the
minimum allocation and minimum benefit requirements are satisfied by
substituting "4 percent" for "3 percent" and "7.5 percent" for "5
percent" where such figures appear in Section 12.4(a).
6 OTHER PLANS. The Committee shall, to the extent permitted by
the Code and in accordance with the Regulations, apply the provisions of
this Article by taking into account the benefits payable and the
contributions made under any other plans maintained by the Company or
any of its Affiliates which are qualified under Section 401(a) of the
Code to prevent inappropriate omissions or duplication of minimum
benefits or contributions.
ARTICLE XIII. DESIGNATION OF BENEFICIARIES
1 BENEFICIARY DESIGNATION. Every Member shall file with the
Administrator a written designation of one or more persons as the
Beneficiary who shall be entitled to receive the amount, if any, payable
under the Plan upon such Member's death. A Member may from time to time
revoke or change such Member's Beneficiary designation without the
consent of any prior Beneficiary by filing a new designation with the
Administrator. Notwithstanding the foregoing, no designation of a
nonspousal Beneficiary by a Member shall be given effect unless, in
conformity with Section 417(a)(2)(A) of the Code and the Regulations
thereunder, such Member's Surviving Spouse, if any, had consented in
writing to such designation or expressly consented to all future
designations; provided that (a) spousal consent shall not be required
where the spouse cannot be located or on account of such other
circumstances, if any, as are set forth in the Regulations and
(b) spousal consent, if required, must acknowledge the effect of such
designation and be witnessed by a Plan representative or notary public.
The last such designation received by the Administrator shall be
controlling; provided, however, that no designation, or change or
revocation thereof, shall be effective unless received by the
Administrator prior to the Member's death, and in no event shall it be
effective as of a date prior to such receipt. All decisions of the
Administrator concerning the effectiveness of any Beneficiary
designation, and the identity of any Beneficiary, shall be final. If a
Beneficiary shall die after the death of the Member and prior to
receiving the distribution that would have been made to such Beneficiary
had such Beneficiary's death not occurred, and no alternate Beneficiary
has been designated, then for the purposes of the Plan the distribution
that would have been received by such Beneficiary shall be made to the
Beneficiary's estate.
2 FAILURE TO DESIGNATE BENEFICIARY. Subject to Section 13.1, if
no Beneficiary designation is in effect at the time of a Member's death,
the payment of the amount, if any, payable under the Plan upon such
Member's death shall be made to the Member's Surviving Spouse, if any,
or if the Member has no Surviving Spouse, to the Member's estate. If
the Administrator is in doubt as to the right of any person to receive
such amount, the Committee may direct the Trustee to retain such amount,
without liability for any interest thereon, until the rights thereto are
determined, or the Committee may direct the Trustee to pay such amount
without liability for any interest thereon, until the rights thereto are
determined, or the Committee may direct the Trustee to pay any such
amount into any court of appropriate jurisdiction, and such payment
shall be a complete discharge of the liability of the Plan and the Trust
therefor.
ARTICLE XIV. ADMINISTRATION OF THE PLAN
1 POWERS AND DUTIES OF THE COMMITTEE. The Committee which shall
have general responsibility for the administration of the Plan
(including but not limited to complying with reporting and disclosure
requirements, and establishing and maintaining Plan records). In the
exercise of its sole and absolute discretion, the Committee shall
interpret the Plan's provisions and shall determine the eligibility of
individuals for benefits. The Committee shall appoint an Employee to
act as Administrator and to perform such duties as designated herein or
by the Committee. The Committee shall also engage such certified public
accountants and other advisers and service providers, who may be
accountants, advisers or service providers for the Company or an
Affiliate, as it shall require or may deem advisable for purposes of the
Plan.
The Committee shall have the power to appoint or remove one or more
investment advisers and to delegate to such adviser authority and
discretion to manage (including the power to acquire and dispose of) the
assets for the Plan, provided that (a) each adviser with such authority
and discretion shall be either a bank, an insurance company or a
registered investment adviser under the Investment Advisers Act of 1940,
and shall acknowledge in writing that it is a fiduciary with respect to
the Plan and (b) the Committee shall periodically review the investment
performance and methods of each adviser with such authority and
discretion.
2 POWERS AND DUTIES OF TRUSTEE. The Trustee shall have
responsibility under the Plan for the management and control of the
assets of the Trust Fund and shall have discretionary responsibility for
the investment and management of such assets, except to the extent that
the Plan and Trust expressly provide that the Trustee is subject to the
direction of the Committee with respect to all or a portion of the Trust
Fund or the direction of a Member with respect to the investment of the
Member's Account in accordance with Section 4.3, in which case the
Trustee shall be subject to proper directions of the Committee or Member
which are made in accordance with the terms of the Plan and are not
contrary to ERISA, and except to the extent that the Trustee is subject
to the direction of an investment adviser pursuant to Section 14.10.
3 AGENTS; REPORT OF COMMITTEE TO BOARD. The Committee may
arrange for the engagement of such legal counsel, who may be counsel for
the Company or an Affiliate, and make use of such agents and clerical or
other personnel as it shall require or may deem advisable for purposes
of the Plan. The Committee may rely upon the written opinion of such
counsel and the accountants engaged by the Committee, and may delegate
to any such agent, or to any subcommittee or member of the Committee its
authority to perform any act hereunder, including, without limitation,
those matters involving the exercise of discretion, provided that such
delegation shall be subject to revocation at any time at the discretion
of the Committee. The Committee shall report to the Board, or to a
committee of the Board designated for that purpose, as frequently as
shall be specified by the Board or such committee, with regard to the
matters for which it is responsible under the Plan.
4 STRUCTURE OF COMMITTEE. The Committee shall consist of 3 or
more members, each of whom shall be appointed by, shall remain in office
at the will of, and may be removed with or without cause by the Board.
Any member of the Committee may resign at any time. No member of the
Committee shall be entitled to act on or decide any matter relating
solely to such member or any of such member's rights or benefits under
the Plan. In the event that the Committee is unable to act in any
matter by reason of the foregoing restriction, the Board shall act on
such matter. The members of the Committee shall not receive any special
compensation for serving in the capacities as members of the Committee
but shall be reimbursed for any reasonable expenses incurred in
connection therewith. Except as otherwise required by ERISA, no bond or
other security need be required of the Committee or any member thereof
in any jurisdiction. Any member of the Committee, any subcommittee or
agent to whom the Committee delegates any authority, and any other
person or group of persons, may serve in more than one fiduciary
capacity (including service both as a trustee and administrator) with
respect to the Plan.
5 ADOPTION OF PROCEDURES OF COMMITTEE. The Committee shall
establish its own procedures and the time and place for its meetings,
and provide for the keeping of minutes of all meetings. A majority of
the members of the Committee shall constitute a quorum for the
transaction of business at a meeting of the Committee. Any action of
the Committee may be taken upon the affirmative vote of a majority of
the members of the Committee at a meeting. The Committee may also act
without meeting by unanimous written consent.
6 INSTRUCTIONS FOR DISBURSEMENTS. All requests or directions
for payment, distribution or disbursement from the Plan shall be signed
by a member of the Committee or such other person or persons as the
Committee may from time to time designate in writing. This person shall
cause to be kept full and accurate accounts of receipts and
disbursements of the Plan, shall cause to be deposited all funds of the
Plan to the name and credit of the Plan in such depositories as may be
designated by the Committee, shall cause to be disbursed the monies and
funds of the Plan when so authorized by the Committee, and shall
generally perform such other duties as may be assigned to such person
from time to time by the Committee.
7 CLAIMS FOR BENEFITS. All claims for benefits under the Plan
shall be submitted in writing to the Committee. Within a reasonable
period of time the Committee shall decide the claim by majority vote in
the exercise of its sole and absolute discretion. Written notice of the
decision on each such claim shall be furnished within 90 days after
receipt of the claim; provided that, if special circumstances require an
extension of time for processing the claim, an additional 90 days from
the end of the initial period shall be allowed for processing the claim,
in which event the claimant shall be furnished with a written notice of
the extension prior to the termination of the initial 90-day period
indicating the special circumstance requiring an extension. If the
claim is wholly or partially denied, such written notice shall set forth
an explanation of the specific findings and conclusions on which such
denial is based. A claimant may review all pertinent documents and may
request a review by the Committee of such a decision denying the claim.
Such a request shall be made in writing and filed with the Committee
within 60 days after delivery to said claimant of written notice of said
decision. Such written request for review shall contain all additional
information which the claimant wishes the Committee to consider. The
Committee may hold any hearing or conduct any independent investigation
which it deems necessary to render its decision, and the decision on
review shall be made as soon as possible after the Committee's receipt
of the request for review. Written notice of the decision on review
shall be furnished to the claimant within 60 days after receipt by the
Committee of a request for review, unless special circumstances require
an extension of time for processing, in which event an additional 60
days shall be allowed for review and the claimant shall be so notified
in writing. Written notice of the decision on review shall include
specific reasons for such decision. For all purposes under the Plan,
such decisions on claims (where no review is requested) and decisions on
review (where review is requested) shall be final, binding and
conclusive on all interested parties as to participation and benefit
eligibility, the Employee's amount of Compensation and as to any other
matter of fact or interpretation relating to the Plan.
8 HOLD HARMLESS. To the maximum extent permitted by law, no
member of the Committee shall be personally liable by reason of any
contract or other instrument executed by such member or on such member's
behalf in such member's capacity as a member of the Committee nor for
any mistake of judgment made in good faith, and the Company shall
indemnify and hold harmless, directly from its own assets (including the
proceeds of any insurance policy the premiums of which are paid from the
Company's own assets), each member of the Committee and each other
officer, employee, or director of the Company or an Affiliate to whom
any duty or power relating to the administration or interpretation of
the Plan or to the management and control of the assets of the Plan may
be delegated or allocated, against any cost or expense (including
counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Company) arising out of any act or
omission to act in connection with the Plan unless arising out of such
person's own fraud or bad faith.
9 SERVICE OF PROCESS. The Secretary of the Company or such
other person designated by the Board shall be the agent for service of
process under the Plan.
10 INVESTMENT ADVISER. If the Committee appoints an investment
adviser pursuant to Section 14.1 with respect to all or a portion of the
Trust Fund, the Trustee shall invest and reinvest such portion of the
Trust Fund only to the extent and in the manner directed by the
investment adviser in writing. In performing its investment duties, the
investment adviser shall have, with respect to such portion of the Trust
Fund, all of the powers of the Trustee provided herein and in the Trust
Agreement. If the Trustee does not receive written instructions from an
investment adviser with respect to such portion of the Trust Fund, the
Trustee shall, after providing notice to the investment adviser, invest
such amounts in short-term securities of the United States or any
instrumentality thereof or in one or more investment companies commonly
known as "money market" funds, and with the consent of the Committee in
a common fund maintained by the Trustee for short-term investments. If
the investment adviser resigns, or is removed, or is no longer a
qualified investment adviser as defined in ERISA, the Trustee shall
reassume complete investment responsibility for such portion of the
Trust Fund unless and until a new qualified investment adviser is
appointed by the Committee.
Unless the Trustee participates knowingly in, or knowingly
undertakes to conceal, an act or omission of the investment adviser,
knowing such act or omission to be a breach of the fiduciary
responsibility of the investment adviser with respect to the Plan, the
Trustee shall not be liable for any act or omission of the investment
adviser and shall not be under any obligation to invest or otherwise
manage the assets of the Plan that are subject to the management of the
investment adviser and, to the maximum extent permitted by ERISA, the
Trustee shall have no liability or responsibility for acting or not
acting in accordance with, any written direction of the investment
adviser. The Company agrees, to the extent permitted by law, to
indemnify the Trustee and hold it harmless from and against any claim or
liability that may be asserted against it, otherwise than on account of
the Trustee's own negligence or willful misconduct, for reason of the
Trustee's taking or refraining from taking any action in accordance with
this Section 14.10.
ARTICLE XV. TRANSFER OF PLAN ASSETS TO SUCCESSOR PLAN
No transfer of the Plan's assets and liabilities to a successor
employee benefit plan (whether by merger or consolidation with such
successor plan or otherwise) shall be made unless (a) the Committee
authorizes such transfer and (b) each Member would, if either the Plan
or such successor plan then terminated, receive a benefit immediately
after such transfer which (after taking account of any distributions or
payments to them as part of the same transaction) is equal to or greater
than the benefit such Member would have been entitled to receive
immediately before such transfer if the Plan had then been terminated.
The Committee may also request appropriate indemnification (as permitted
by law) from the employer or employers maintaining such successor plan
before making such a transfer.
ARTICLE XVI. AMENDMENT OR TERMINATION OF THE PLAN AND TRUST
1 RIGHT TO AMEND, SUSPEND OR TERMINATE PLAN.
(a) Subject to the provisions of Section 16.1(c), the Board
reserves the right at any time to amend, suspend or terminate the Plan,
any contributions thereunder, the Trust, or any contract issued by an
insurance carrier forming a part of the Plan, in whole or in part, and
for any reason and without the consent of any Member, Beneficiary,
Surviving Spouse or other eligible survivor. The Plan shall
automatically be terminated upon complete and final discontinuance of
contributions thereunder.
(b) The Committee may adopt any ministerial and nonsubstantive
amendment which may be necessary or appropriate to facilitate the
administration, management and interpretation of the Plan or to conform
the Plan thereto, or to qualify or maintain the Plan and the Trust as a
plan and trust meeting the requirements of Sections 401(a), 401(k) and
501(a) of the Code or any other applicable section of law and the
Regulations issued thereunder, provided said amendment does not have any
material effect on the currently estimated cost to the Company of
maintaining the Plan.
(c) No amendment or modification shall be made which would
retroactively (1) reduce, in contravention of section 411(d)(6) of the
Code, any accrued benefits or (2) make it possible for any part of the
funds of the Plan (other than such part as is required to pay taxes, if
any, and administrative expenses as provided in Section 17.12) to be
used for or diverted to any purposes other than for the exclusive
benefit of Member and the Beneficiaries and Surviving Spouses and other
eligible survivors under the Plan prior to the satisfaction of all
liabilities with respect thereto.
2 RETROACTIVITY. Subject to the provisions of Section 16.1
(except Section 16.1(c)(1)), any amendment, modification, suspension or
termination of any provisions of the Plan may be made retroactively if
necessary or appropriate to qualify or maintain the Plan, the Trust and
any contract with an insurance company which may form a part of the Plan
as a plan and trust meeting the requirements of Sections 401(a), 401(k)
and 501(a) of the Code or any other applicable section of law and the
Regulations issued thereunder.
3 NOTICE. Notice of any amendment, modification, suspension or
termination of the Plan shall be given by the Board or the Committee,
whichever adopts the amendment, to the other and to the Trustee.
4 NO FURTHER CONTRIBUTIONS. Upon termination of the Plan or a
complete discontinuance of contributions, the Company shall not make any
further contributions under the Plan, and no amount shall thereafter be
payable under the Plan to or in respect of any Member except as provided
in this Article. To the maximum extent permitted by ERISA, transfers,
distributions or other dispositions of the assets of the Plan as
provided in this Article shall constitute a complete discharge of all
liabilities under the Plan. The Committee shall remain in existence and
all of the provisions of the Plan which in the opinion of the Committee
are necessary for the execution of the Plan and the administration,
distribution, transfer or other disposition of the assets of the Plan in
accordance with this Section shall remain in force.
After adjustment for profits and losses of the Trust Fund to such
termination date in the manner described in Article V, each Account of a
Member who has not incurred a Break in Service which contains an Accrued
Benefit (determined without regard to this Section) as of the date of
such termination shall be fully vested as of such date.
Except as may be prohibited by Section 411(a)(11) of the Code and
the Regulations thereunder, upon or after the termination of the Plan,
the Board may terminate the Trust and upon such termination the Trustee
shall pay in a single sum to each Member the full amount credited to
such Member's individual Account. Without limiting the foregoing, any
such distributions may be made in cash, other property, or any
combination, as the Committee in its sole discretion may direct.
All determinations, approvals and notifications referred to above
shall be in form and substance and from a source satisfactory to counsel
for the Plan.
5 PARTIAL TERMINATION. In the event that a "partial
termination" (within the meaning of Section 411(d)(3) of the Code) of
the Plan has occurred then (a) the interest of each affected Member in
such Member's Account as to whom such termination occurred shall
thereupon be nonforfeitable, but shall otherwise be payable as though
such termination has not occurred and (b) the provisions of Sections
16.2, 16.3 and 16.4 which in the opinion of the Committee are necessary
for the execution of the Plan and the allocation and distribution of the
assets of the Plan shall apply; provided, however, that the Board, in
its discretion, subject to any necessary governmental approval, may
direct that the amounts held in the Accounts of such Members as to whom
such partial termination occurred be segregated by the Trustee as a
separate plan and applied for the benefit of such Members in the manner
described in Section 16.4 above.
ARTICLE XVII. GENERAL LIMITATIONS AND PROVISIONS
1 ALL RISKS ON MEMBERS AND BENEFICIARIES. Each Member and
Beneficiary shall assume all risk in connection with any decrease in the
value of the assets of the Trust Fund and the Members' Accounts. The
Company and the Committee shall not be liable or responsible for any
decrease in the value of the assets of the Trust and the Members'
Accounts.
2 TRUST FUND IS SOLE SOURCE OF BENEFITS. The Trust Fund shall
be the sole source of benefits under the Plan and, except as otherwise
required by ERISA, the Company and the Committee assume no liability or
responsibility for payment of such benefits, and each Member,
Beneficiary or other person who shall claim the right to any payment
under the Plan shall be entitled to look only to the Trust Fund for such
payment and shall not have any right, claim or demand therefor against
the Company, the Committee or any member thereof, or any employee or
director of the Company.
3 NO RIGHT TO CONTINUED EMPLOYMENT. Nothing contained in the
Plan shall give any Employee the right to be retained in the employment
of the Company or any of its subsidiaries or affiliated or associated
corporations or affect the right of any such employer to dismiss any
Employee. The adoption and maintenance of the Plan shall not constitute
a contract between the Company and Employee or consideration for, or an
inducement to or condition of, the employment of any Employee.
4 PAYMENT ON BEHALF OF PAYEE. If the Committee shall find that
any person to whom any amount is payable under the Plan is unable to
care for such Member's affairs because of illness or accident, or is a
minor, or has died, then any payment due such Member or such Member's
estate (unless a prior claim therefor has been made by a duly appointed
legal representative) may, if the Committee so elects, be paid to such
Member's spouse, a child, a relative, an institution maintaining or
having custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise
entitled to payment. Any such payment shall be a complete discharge of
the liability of the Plan and the Trust therefor.
5 NONALIENATION. Except insofar as applicable law may otherwise
require or pursuant to a Qualified Domestic Relations Order, as defined
below, no economic interest, expectancy, benefit, payment, claim or
right of any Member or Beneficiary under the Plan and the Trust shall be
subject in any manner to any claims of any creditor of any Member or
Beneficiary, nor to alienation by anticipation, sale, transfer,
assignment, bankruptcy pledge, attachment, charge or encumbrance of any
kind. If any person shall attempt to take any action contrary to this
Section, such action shall be null and void and of no effect, and the
Trustee shall disregard such action and shall not in any manner be bound
thereby and shall suffer no liability on account of its disregard
thereof.
For purposes of the Plan, a "Qualified Domestic Relation Order"
means any judgment, decree or order (including approval of a property
settlement agreement) which has been determined by the Committee in
accordance with procedures established under the Plan to constitute a
qualified domestic relations order within the meaning of Section
414(p)(1) of the Code.
6 MISSING PAYEE. If the Committee cannot ascertain the
whereabouts of any person to whom a payment is due under the Plan, and
if, after 5 years from the date such payment is due, a notice of such
payment due is mailed to the last known address of such person, as shown
on the records of the Committee or the Company, and within 3 months
after such mailing such person has not made written claim therefor, the
Committee, if it so elects, after receiving advice from counsel to the
Plan, may direct that such payment and all remaining payments otherwise
due to such person be canceled on the records of the Plan and the amount
thereof forfeited and applied to reduce the contributions of the Company
and upon such cancellation, the Plan and Trust shall have no further
liability therefor, except that, in the event such person later notifies
the Committee of such person's whereabouts and requests the payment or
payments due to such persons under the Plan, the amounts so applied
shall be paid to such persons as provided herein.
7 REQUIRED INFORMATION. Each Member shall file with the
Committee such pertinent information concerning such Member, such
Member's spouse and such Member's Beneficiary, or such other person as
the Committee may specify, and no Member, or Beneficiary, or other
person shall have any rights or be entitled to any benefits under the
Plan unless such information is filed by or with respect to such Member.
8 SUBJECT TO TRUST AGREEMENT. Any and all rights or benefits
accruing to any persons under the Plan shall be subject to the terms of
the Trust Agreement which the Company shall enter into with the Trustee
providing for the administration of the Trust Fund.
9 COMMUNICATIONS TO COMMITTEE. All elections, designations,
requests, notices, instructions and other communications from the
Company, a Member, Beneficiary or other person to the Committee required
or permitted under the Plan shall be in such form as is prescribed from
time to time by the Committee, shall be mailed by first class mail or
delivered to such location as shall be specified by the Committee, and
shall be deemed to have been given and delivered only upon actual
receipt thereof by the Committee at such location.
10 TRANSFERS. The Plan and Trust may accept funds transferred
to the Plan or Trust from an employee benefit plan qualified under
Section 401(a) of the Code, except that the Plan and Trust may not
accept any amounts transferred from a defined benefit or money purchase
pension plan or any other defined contribution plan subject to the joint
and survivor annuity requirements of Code Section 401(a)(11) and may not
accept, without the approval of the Committee, any transfer that does
not qualify as an elective transfer under Treasury Regulation <section>
1.411(d)-4(A-3(b)), as amended from time to time. Any amounts so
accepted on behalf of a Member shall be held in such Member's Rollover
Subaccount. Notwithstanding the foregoing, any amounts accepted on
behalf of the Member from the Prior Plan shall be held in the same
subaccount categories those funds were held under in the Prior Plan.
11 COMMUNICATIONS FROM THE COMPANY OR COMMITTEE. All notices,
statements, reports and other communications from the Company or the
Committee to any Employee, Member, Surviving Spouse, Beneficiary or
other person required or permitted under the Plan shall be deemed to
have been duly given when delivered to, or when mailed by first class
mail, postage prepaid and addressed to, such Employee, Member, Surviving
Spouse, Beneficiary or other person at such address last appearing on
the records of the Committee, or when posted by the Company or the
Committee as permitted by law.
12 FEES AND EXPENSES. The expenses of administering the Plan
including (a) the fees and expenses of any Employee and of the Trustee
for the performance of their duties under the Trust, (b) the expenses
incurred by the members of the Committee in the performance of their
duties under the Plan (including reasonable compensation for any legal
counsel, certified public accountants and any agents and cost of
services rendered in respect of the Plan), and (c) all other proper
charges and disbursements of the Trustee or the members of the Committee
(including settlements of claims or legal actions brought against any
party, including the Trustee, approved by the Company and the Committee,
after consulting with counsel to the Plan), are to be paid by the Plan
unless paid in full by the Company. In estimating costs under the Plan,
administrative costs may be anticipated. The members of the Committee
shall not receive any special compensation for serving in their
capacities as members of the Committee.
13 VOTING AND TENDER OR EXCHANGE RIGHTS. Except as otherwise
required by ERISA, the Code and Regulations, all voting rights of Shares
shall be exercised by the Trustee and the Members or their Beneficiaries
in accordance with the following provisions of this Section:
(a) With respect to all corporate matters submitted to
shareholders, all Shares shall be voted only in accordance with the
directions of the Members as given to the Committee and communicated in
turn by the Committee to the Trustee. Each Member shall be entitled to
direct the voting of only the Shares (including fractional Shares to
1/100th of a Share) allocated to such Member's Account, and if this
subsection applies to Shares allocated to the Account of a deceased
Member, such Member's Beneficiary shall be entitled to direct the voting
with respect to such Shares as if such Beneficiary were the Member.
(b) If Members are entitled under this Plan to direct the vote of
Shares with respect to a matter, then, before each annual or special
shareholders' meeting of Carolina Freight Corporation at which the
matter is to be voted, the Company shall furnish to each Member a copy
of the proxy solicitation material sent generally to shareholders,
together with a form requesting instructions on how the Shares with
respect to which the Member has voting rights and responsibility
(including fractional Shares to 1/100th of a Share) are to be voted.
Upon timely receipt of such instructions, the Trustee (after combining
votes of fractional Shares to give effect to the greatest extent
possible to Members' instructions) shall vote the Shares as instructed.
Neither the Trustee nor the Committee shall make recommendations to
Members on whether to vote or how to vote. If voting instructions of
any Member are not timely received for a particular shareholders'
meeting, the Shares for which the Member is responsible shall not be
voted.
(c) With respect to any matter as to which voting instructions are
not required to be solicited from Members under this Plan, the Trustee
shall vote all Shares held in the Trust Fund. Any vote by the Trustee
shall be made in its sole discretion, after it determines such action to
be in the best interests of the Members and their Beneficiaries.
(d) The Company shall notify each Member of each tender or exchange
offer for the Shares and utilize its best efforts to distribute or cause
to be distributed to each Member in a timely manner all information
distributed to shareholders of Carolina Freight Corporation in
connection with any such tender or exchange offer. Each Member shall
have the right from time to time with respect to the Shares allocated to
such Member's Account (including fractional Shares to 1/100th of a
Share) to instruct the Trustee in writing as to the manner in which to
respond to any tender or exchange offer which shall be pending or which
may be made in the future for all such Shares or any portion thereof. A
Member's instructions shall remain in force until superseded in writing
by the Member. The Trustee shall tender or exchange whole Shares only
as and to the extent so instructed. If the Trustee shall not receive
instructions from a Member regarding any tender or exchange offer for
Shares, the Trustee shall tender or exchange any Shares allocated to
such Member's Account in the same proportion as the tendering of Shares
for which instructions were received.
(e) If Section 17.13(d) applies to Shares allocated to the Account
of a deceased Member, such Member's Beneficiary shall be entitled to
direct the manner in which to respond to any tender or exchange offer as
if such Beneficiary were the Member.
14 EXCLUSIVE BENEFIT OF MEMBERS AND BENEFICIARIES. In no event
shall any part of the funds of the Plan be used for or diverted to any
purposes other than for the exclusive benefit of Members and their
Beneficiaries under the Plan except as permitted under Section 403(c) of
ERISA. Upon the transfer by the Company of any money to the Trustee,
all interest of the Company therein shall cease and terminate.
15 ADDITIONAL POWERS OF THE COMMITTEE. Notwithstanding any
provision of the Plan to the contrary, the Committee shall have those
additional powers, rights and obligations provided under the Trust
Agreement.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Plan to be executed
this ____ day of ______________, 1995, to be effective as specified
above.
COMPLETE LOGISTICS COMPANY
By:______________________________
[Corporate Seal] _________ President
ATTEST:
_________________________
__________ Secretary
<PAGE>
AMENDMENT TO
COMPLETE LEASING CONCEPTS, INC. EMPLOYEE
SAVINGS AND PROFIT SHARING PLAN
WHEREAS, effective October 6, 1993, Complete Leasing Concepts, Inc.
(the "Company") adopted the Complete Leasing Concepts, Inc. Employee
Savings and Profit Sharing Plan (the "Plan") and the Complete Leasing
Concepts, Inc. Employee Savings and Profit Sharing Plan Trust (the
"Trust") for the benefit of its employees; and
WHEREAS, effective November 1, 1995, it is desired to amend the Plan
and Trust to allow for investment in the common stock of Arkansas Best
Corporation and effective October 6, 1995, to revise the provisions for
Member directed investments and the limitations on distributions.
NOW, THEREFORE, pursuant to its authority under Section 16.1 of the
Plan, the Company hereby amends the Plan as follows:
1. Effective November 1, 1995, new Sections 1.4.A. and 1.4.B shall be
added to Article I, immediately following existing Section 1.4, and such
new sections shall read as follows:
"1.4.A. "Arkansas Best Stock" shall mean the common stock of
Arkansas Best Corporation, a Delaware corporation, or its successor."
"1.4.B. "Arkansas Best Stock Fund" shall mean the Investment
Fund invested primarily in Arkansas Best Stock as provided in Section
4.5."
2. Effective November 1, 1995, existing Section 1.46, the definition
of Shares shall be deleted in its entirety, Section 1.46 shall be
"reserved" and "Arkansas Best Stock" shall replace the word "Shares" any
and every place the word "Shares" appears.
3. Effective October 6, 1995, existing Section 4.1 shall be deleted
in its entirety and replaced with the following new Section 4.1,
provided however, that the references to the Arkansas Best Fund shall be
effective November 1, 1995:
"4.1 ESTABLISHMENT OF INVESTMENT FUNDS. All monies, securities
or other property received as contributions under the Plan shall be
delivered to the Trustee under the Trust, to be managed, invested,
reinvested and distributed for the exclusive benefit of the Members
and their Beneficiaries in accordance with the Plan, the Trust
Agreement and any agreement with an insurance company or other
financial institution constituting a part of the Plan and Trust. By
written notice to the Trustee, the Committee may delegate to itself
the authority to exercise investment management responsibilities over
all or any portion of the Trust Fund. The Trustee, at the direction
of the Committee, shall cause to be established or maintain at least
three diversified Investment Funds having materially different risk
and reward characteristics in addition to the Arkansas Best Stock
Fund. The assets of each such Investment Fund may be invested in
shares of a registered investment company, provided that such shares
constitute securities described in Section 401(b)(1) of ERISA.
Moneys in any such Fund in amounts estimated by the Trustee to be
needed for cash withdrawals, inter-Fund transfers or other purposes,
or in amounts too small to be reasonably invested, may be retained by
the Trustee in cash or invested in a manner consistent with such
purposes."
4. Effective October 6, 1995, existing Sections 4.2, 4.3, 4.4 and
4.5 shall be deleted in their entirety and replaced with the following
new Sections 4.2, 4.3, 4.4 and 4.5:
"4.2 INVESTMENT OF PAYSOP SUBACCOUNT. A Member's PAYSOP
Subaccount shall be invested pursuant to Sections 4.3 and 4.4, after
receipt of the proceeds from the sale of Shares pursuant to the
tender offer which caused the Shares to cease to be readily tradable.
4.3 ACCOUNT INVESTMENT DIRECTION. Notwithstanding any other
provision of the Plan or the Trust Agreement with respect to control
over and direction of the investment of assets in the Trust Fund,
each Member may, at such time and in such manner as the Administrator
shall determine pursuant to a uniform policy established by it,
direct that all or any part (subject to such percentage increment
limitations as the Administrator shall determine from time to time)
of the amounts constituting such Member's existing Accounts and his
future contributions be invested among such investment funds as the
Administrator shall offer from time to time ("Investment Funds") for
direction by Members. This Section is intended to meet the
requirements of Section 404(c) of ERISA by allowing each Member to
direct the investment of his individual Accounts.
"4.4 TRANSFERS OF INVESTMENTS. At such times as the
Administrator shall permit, and in such manner as the Administrator
shall determine, pursuant to uniform policies established by it, each
Member may (i) direct that all, or any part (subject to such percent
increment limitations as the Administrator shall determine from time
to time) of the amounts in the Member's Accounts which are invested
on his behalf in any of the Investment Funds, be liquidated and the
proceeds thereof reinvested in the other Investment Funds and (ii)
redirect the investment of future contributions (and future earnings
on such amounts). In the event at any time a Member does not elect
to redirect any Account balances or future contributions as provided
for in this Section 4.4, then such Member's prior directions shall
remain in effect.
The Trustee shall carry out the Member's directions or
redirections permitted by this Section 4.4 as soon as
administratively practicable. Notwithstanding the foregoing, in the
event a Member has directed that only part of his interest in any of
the Investment Funds be liquidated and reinvested in one or more of
the other Investment Funds only the nearest value of whole units will
be liquidated and reinvested.
If a Member fails or refuses to exercise any of his investment
direction rights as provided for in this Section 4.4, the Trustee
shall invest all amounts (not otherwise directed) in the lowest risk
Investment Fund available, as determined by the Committee.
The Administrator shall establish and maintain, or cause the
appropriate Trustee to establish and maintain procedures and records
which will adequately reflect the state of each Investment Fund and
the proportionate interest of each Member in each Investment Fund,
including the amount of each Member's various Accounts allocated to
each such Investment Fund.
Shares of stock held in the Arkansas Best Stock Fund shall be
voted in accordance with Section 17.13 below. Any shares of a
registered investment company allocated to a Member's Account shall
be voted in accordance with directions of the Member (or
Beneficiary), with any fractional shares being voted on a combined
basis to the extent possible to reflect the directions of voting
Members. The Trustee or a duly appointed Investment Manager shall be
responsible for the voting of any other securities within an
Investment Fund and the exercise of any tender offer or redemption
rights with respect to any such securities.
4.5 ARKANSAS BEST STOCK FUND. Effective November 1, 1995, the
Arkansas Best Stock Fund shall be one of the Investment Funds
available for the investment of any portion of a Member's Account in
accordance with Section 4.4. The Arkansas Best Stock Fund may be
partially invested in cash, cash-equivalents, or short-term
investments as needed to meet liquidity requirements, or in amounts
that are too small to reasonably invest in Arkansas Best Stock.
Except as provided above, all assets of the Arkansas Best Stock Fund
shall be invested and reinvested exclusively in Arkansas Best Stock.
All shares of Arkansas Best Stock in the Arkansas Best Stock
Fund shall be voted by the Trustee in such manner as may be directed
by the respective Members, Beneficiaries and Alternate Payees, with
fractional shares being voted on a combined basis to the extent
possible to reflect the direction of the voting Members. In the
event that there is a tender offer or exchange offer for outstanding
shares of Arkansas Best Stock, each Member and Beneficiary shall be
permitted to elect whether shares of Company Stock held in his
Account should be tendered or exchanged. Rights to tender or
exchange with respect to shares allocated to a Member's Account with
respect to which direction has not been received by the Trustee shall
not be tendered or exchanged but shall continue to be held by the
Trust.
Subject to the provisions of the Plan and Trust, the Arkansas
Best Stock Fund may sell shares of Arkansas Best Stock to any person
(including the issuer of such shares), provided that any sale to a
party-in-interest must be made for not less than adequate
consideration. No commission shall be paid with respect to sales or
purchases of Arkansas Best Stock from parties-in-interest. The sale
price for each such share of Arkansas Best Stock sold to a party-in-
interest shall not be less than the price of Arkansas Best Stock,
prevailing at the time of sale, on a national securities exchange
which is registered under section 6 of the Securities Exchange Act of
1934, or, if Arkansas Best Stock is not, at the time of such
purchase, traded on such national securities exchange, shall be not
more than the offering price for the Arkansas Best Stock as
established by the current bid and asked prices quoted by persons
independent of the Company and of any party-in-interest. In the
event that either (i) the sale price per share from the Company as
determined pursuant to the foregoing is less than the then par value
of such Arkansas Best Stock, or (ii) Trustee is of the opinion that
the sale of such shares directly to the Company or a party-in-
interest might involve a possible violation of any federal or state
securities law, or any rule or regulation thereunder, Trustee shall
not sell such shares directly to the Company, but shall sell such
shares in the open market in exchange transactions or in any other
lawful manner.
Notwithstanding anything to the contrary contained in the Plan,
the Administrator may, in its sole discretion, restrict any Plan
transactions involving Arkansas Best Stock to ensure that the
operation of the Plan complies with Rule 16(b)(3), promulgated under
the Securities Exchange Act of 1934, as amended, or any other
applicable securities law."
5. Effective October 6, 1995, existing Section 4.5 shall be
renumbered as Section "4.6."
6. Effective October 6, 1995, existing Section 7.5 shall be deleted
in its entirety and replaced with the following new Section 7.5;
provided however, that should the Internal Revenue Service fail to
approve this portion of the amendment, it shall become void:
"7.5 MEDIUM OF PAYMENT. Distribution of a Member's Accrued
Benefit shall be made entirely in cash, provided, however, that
distribution of a Member's PAYSOP Subaccount shall be made in whole
shares of Arkansas Best Stock, with the value of any fractional
interest in shares paid in cash, unless the Member elects to receive
such amounts in cash, in which case the shares of Arkansas Best Stock
allocated to the Member's PAYSOP Subaccount immediately prior to the
date of distribution shall be converted to cash and the amount that
the Member shall receive is the fair market value of the shares of
Arkansas Best Stock as of the date such shares are converted to
cash."
7. Effective October 6, 1995, new Section 7.9 shall be added to
Article VII immediately following existing Section 7.8 and such new
section shall read as follows:
"7.9 DISTRIBUTION LIMITATIONS ON BEFORE-TAX SUBACCOUNT.
Notwithstanding any provisions to the contrary herein, no
distribution shall be made of any Before-Tax Contributions or the
earnings thereon prior to the earliest of:
Separation from service, death, or disability (all as defined in
Code Section 401(k) and the regulations thereunder).
Termination of the Plan without establishment of or maintenance
of another defined contribution plan (other than an employee stock
ownership plan as defined in Code Section 4975(e)(7)), as provided in
Treasury Regulations.
The disposition by the Company of substantially all of the
assets used by such Company in a trade or business of such Company,
as provided in Treasury Regulations.
The disposition by the Company of its interest in a subsidiary,
as provided in Treasury Regulations.
The attainment of age fifty-nine and one-half (59 1/2 ) as
provided in Section 10.2 or the required beginning date under Code
Section 401(a)(9).
Financial hardship pursuant to the provisions of Section 10.1."
8. Effective November 1, 1995, existing Section 17.13 shall be
deleted in its entirety, and Sections 17.14 and 17.15 shall be
renumbered as Sections "17.13" and "17.14," respectively.
IN WITNESS WHEREOF, COMPLETE LEASING CONCEPTS, INC. has caused this
instrument to be executed by its duly authorized officer on this
day of September, 1995.
COMPLETE LEASING CONCEPTS, INC.
BY
Title
DII0CD3F 27859-9
<PAGE>
FIRST AMENDMENT TO THE COMPLETE LEASING CONCEPTS, INC.
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN
THIS AMENDMENT is made by The Complete Logistics Company, formerly known
as Complete Leasing Concepts, Inc. (the "Employer").
WITNESSETH:
WHEREAS, the Employer has previously established and currently maintains
the Complete Leasing Concepts, Inc. Employee Savings and Profit Sharing Plan
which became effective October 1, 1993 (the "Plan") for the benefit of its
eligible employees;
WHEREAS, pursuant to Section 16.1 the Employer reserves the right to amend
or modify the Plan at any time; and
WHEREAS, the Employer wishes to change the name of the Plan to reflect the
Employer's new name;
WHEREAS, the Employer wishes to amend the Plan to reflect the $150,000
compensation limitation;
WHEREAS, the Employer wishes to change the allocation and timing of
forfeitures under the Plan; and
WHEREAS, the Employer wishes to change certain accounting provisions
regarding the Investment Funds and Plan loans;
WHEREAS, the Employer wishes to provide credit for participation purposes
for service provided to Flanagen Trucking Services, Inc.;
WHEREAS, the Employer wishes to provide for the insurance contracts which
will be transferred to the Plan from the Carolina Freight Corporation Employee
Savings and Protection Plan; and
WHEREAS, the Employer wishes to provide for distribution from the Plan to
an alternate payee under a qualified domestic relations order before the
participant attains earliest retirement age;
NOW, THEREFORE, the Employer hereby amends the Plan effective October 1,
1993, except as otherwise stated herein, as follows:
1. Effective November 29, 1993, the Plan is amended by deleting
Section 1.12 of the Plan in its entirety and inserting in lieu thereof the
following:
"Committee: 'The Complete Logistics Company Employee Savings and
Profit Sharing Plan Committee' appointed by the Board and as provided
for in Article XIV. For purposes of ERISA, the Committee shall be
the 'Plan Administrator' and as such is a named fiduciary of the
Plan."
2. Effective November 29, 1993, the Plan is amended by deleting
Section 1.13 in its entirety and inserting in lieu thereof the following:
"Company: The Complete Logistics Company, a California corporation,
formerly known as Complete Leasing Concepts, Inc., or any entity
which succeeds to its rights and obligations with respect to the
Plan."
3. The Plan is amended by deleting the first paragraph of Section 1.14
in its entirety and inserting in lieu thereof the following:
"Cash remuneration actually paid by the Company to an Employee for Service
during the Plan Year which constitutes "wages" within the meaning of
Section 3401(a) of the Code (for purposes of income tax withholding at the
source) but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2)) plus such remuneration which,
but for the deferral thereof pursuant to Sections 125 and 401(k) of the
Code, would have been reported on Form W-2."
4. The Plan is amended by adding the following paragraph to Section 1.14
of the Plan:
"In addition to other applicable limitations set forth in the Plan and
notwithstanding any other provision of the Plan to the contrary, for Plan
Years beginning on or after January 1, 1994, the annual Compensation of
each Member taken into account under the Plan shall not exceed
$150,000.00, as adjusted for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment in
effect for a calendar year applies to any period, not exceeding twelve
months, beginning in such calendar year, over which Compensation is
determined (determination period). If a determination period consists of
fewer than twelve months, the annual compensation limit of Section
401(a)(17)(B) will be multiplied by a fraction, the numerator of which is
a number of months in the determination period and the denominator of
which is twelve. For Plan Years beginning on or after January 1, 1994,
any reference in this Plan to the limitation under Section 401(a)(17) of
the Code shall mean $150,000.00 as adjusted for increases in the
cost-of-living."
5. Effective November 29, 1993, the Plan is amended by deleting
Section 1.34 in its entirety and inserting in lieu thereof the following:
"PLAN: The Complete Logistics Company Employee Savings and Profit
Sharing Plan, as now in effect or as hereafter amended."
6. Effective June 27, 1994, the Plan is amended by adding a second
paragraph to Section 1.56, as follows:
"In calculating a Year of Service for participation purposes, credit
shall be given for service performed for Flanagen Trucking Services,
Inc. for the period prior to June 27, 1994."
7. The Plan is amended by adding the following sentence to Section 4.3
of the Plan immediately following the first sentence of current Section 4.3:
"Notwithstanding the foregoing, the Member may not provide investment
direction with respect to the portion of contributions used to pay
insurance premiums on any life insurance policy allocated to the
Member's Account."
8. The Plan is amended by deleting Section 4.5 in its entirety and
inserting in lieu thereof the following paragraph:
"A loan to a Member under Article XI shall be from such Member's Account
and shall be considered an earmarked investment of the Member's Account.
A loan to a Member shall reduce each subaccount on a pro rata basis and
shall be charged against the Investment Funds each subaccount is invested
in on a pro rata basis. Loan repayments shall reduce the amount of the
loan to the extent they represent principal and shall be invested in the
Investment Funds in accordance with the Member's then existing investment
direction. For loans made before August 1, 1994, repayments shall be
credited to the Member's Before Tax Subaccount. For loans made on or
after August 1, 1994, repayments shall be credited to the Member's
subaccounts on a pro rata basis based on the amount of loan proceeds
withdrawn from each subaccount to originate the loan."
9. The Plan is amended by adding the following Section 4.6 to the Plan:
"4.6 INVESTMENT IN LIFE INSURANCE
a. New investments in individual or group insurance policies
insuring the life of the Member and the Member's dependents
are not allowed. With respect to a Member who transferred
such a policy or contract to this Plan from the Prior Plan,
such policy or contract shall be considered earmarked
investments of the Member's Account, and premiums for such
policies shall be paid out of the contributions allocated
to a Member's Account, provided that no more than 49.99% of
the aggregate amount of Before-Tax, Profit Sharing,
Supplemental and Matching Contributions made on behalf of a
Member may be invested in ordinary life insurance contracts
on the life of such Member or such Member's dependents and
not more than 24.99% may be invested in term life insurance
contracts. If both ordinary and term life insurance
contracts are specifically allocated to the Member's
Account, the sum of the annual term life insurance premium
plus one-half of the ordinary life insurance premium may
not exceed 24.99% of the Before-Tax, Profit Sharing,
Supplemental and Matching Contributions made on behalf of
such Member for a Plan Year. For purposes of this Section
4.6, universal life insurance which specifically limits the
current insurance element to no more than 50% of the
premium charges shall be considered ordinary life
insurance.
b. The beneficiary of all life insurance policies held in a
Member's Account shall be such Member's Account. Upon the
death of a Member's covered dependent, a death benefit
shall be payable to the Member from the Member's Account in
the amount of the excess, if any, of the insurance proceeds
over the cash value of the policy at the date of death of
the insured, subject to the right of the Member to elect to
retain such death benefit in the Member's Account on a form
provided by the Administrator for that purpose.
c. Dividends payable on any policy or contract specifically
allocated to a Member's Account shall be used to provide
additional benefits for the Member or shall be credited to
the Member's Account.
d. A Member who has a policy allocated to such Member's
Account may not borrow amounts from insurers issuing such
policy on the collateral of such policy. The Committee,
however, in its discretion, may borrow against such policy
to fund loans under Article XI."
10. The Plan is amended by deleting the last two sentences of subsection
5.1(b) and by deleting subsection 5.1(c) in its entirety and inserting in lieu
thereof the following:
"(c) Adjustment of Accounts. The aggregate amount credited to the Account
of all Members having Accounts in the Trust Fund shall be adjusted monthly as
of each Valuation Date in the manner described herein so as to be equal to the
value of the assets on such date less the cash value of all life insurance
policies. Before allocating earnings to the Members' subaccounts each
Member's subaccounts will be decreased by the cash surrender value of any life
insurance policies held by the subaccounts, by age 59 1/2 distributions and
hardship distributions that constitute less than a full distribution of the
Members' subaccounts, by forfeitures and by full distributions of a Member's
vested subaccounts that occurred in the prior month. The Member's Account
will be increased by contributions (less any life insurance premiums paid that
month), loan payments and rollovers made on behalf of the Member during the
current month, provided that rollovers of amounts in excess of $50,000 that
are received by the Administrator after the fifteenth day of the current month
will not increase a Member's Account for purposes of this subsection until the
month following the Administrator's receipt of the rollover. Then, based on
the Member's investment fund elections, the Member's subaccounts will be
divided among the various investment funds. The earnings or loss of each
investment fund for the month is then divided pro rata among all subaccounts
invested in each investment fund."
11. The Plan is amended by deleting subsection 5.1(a) in its entirety and
inserting in lieu thereof the following:
"Forfeiture Allocation. Subject to any restoration allocation required
under Article VI, the Committee will allocate Member forfeitures which occur
pursuant to Section 6.10 or 17.6 to first reduce the Company's Matching
Contributions for the Plan Year in which the forfeiture occurs, then to reduce
the Company's Profit Sharing Contribution for the Plan Year in which the
forfeiture occurs and then among the Participants as if the forfeitures were
an Employer Profit Sharing Contribution."
12. The Plan is amended by deleting the first sentence of subsection
6.10(b) in its entirety and inserting in lieu thereof the following:
"The day on which the entire vested portion of the Member's Profit Sharing
and Matching Subaccounts is distributed or deemed to be distributed as
provided in Section 6.8."
13. The Plan is amended by adding the following sentence to Section 7.5
of the Plan:
"Notwithstanding the foregoing, the Member shall receive an in-kind
distribution of any life insurance policy allocated to such Member's Account,
unless such Member elects to have the policy converted into cash."
14. Effective September 1, 1994, the Plan is amended by adding a new
subsection 7.3(c), as follows:
"(c) Distribution may be made to an alternate payee under a qualified
domestic relations order prior to the Member's attainment of earliest
retirement age (as defined under Code <section>414(p)) only if: (1)
the order either specifically allows distribution prior to that time
or permits the Plan and the alternate payee to authorize an earlier
distribution; and (2) if the amount of the alternate payee's benefit
under the Plan exceeds $3,500 and the order requires consent to the
distribution, that the alternate payee consents to the timing of the
distribution."
15. The Plan is amended by deleting the first sentence of Section 7.6 in
its entirety and inserting in lieu thereof the following sentence:
"The Accrued Benefit to be distributed pursuant to this Article VII,
excluding any Shares and life insurance contracts specifically
allocated to the Member's Account which the Member does not elect to
receive in cash, shall be based upon the value of the Member's
Account as of the Valuation Date immediately following the Member's
Termination of Service, adjusted for contributions to and
distributions from the Member's Account after that date and before
the date of distribution."
16. The Plan is amended by deleting subsection 10.1(d) in its entirety
and inserting in lieu thereof the following:
"(d) Upon direction by the Committee, the Trustee shall pay the amount
withdrawn on the effective date specified by the Member. For
purposes of the withdrawal, the Member's Account shall be valued as
of the Valuation Date immediately preceding the effective date of the
withdrawal, adjusted for withdrawals and distributions after such
date. Withdrawals shall be charged against a Member's subaccounts in
the following sequence: (1) Rollover Subaccount; (2) Before-Tax
Subaccount, but excluding earnings accrued thereon after December 31,
1988; (3) nonforfeitable portion of the Matching Subaccount; and (4)
nonforfeitable portion of the Profit Sharing Subaccount. The
reduction in each subaccount shall be charged against the Investment
Funds in which the subaccount is invested on a pro rata basis."
17. The Plan is amended by adding the following phrase to the end of the
first sentence of subsection 11.4(a):
"and any portion of the Applicant's nonforfeitable Accrued Benefit
which is invested in life insurance."
18. The Plan is amended by adding a sentence to the end of Section 17.10
as follows:
"Notwithstanding the foregoing, any amounts accepted on behalf of the
Member from the Prior Plan shall be held in the same subaccount
categories those funds were held under the Prior Plan."
19. The Plan is amended by adding the following Section 17.16 to the
Plan:
"17.16 SUBJECT TO INSURANCE CONTRACT. If the payment of any
benefit under the Plan is provided for by a contract with an insurance
company, the payment of such benefit shall also be subject to the provisions
of such contract."
IN WITNESS WHEREOF, the Employer has caused this Amendment to be executed
by its duly authorized officers, as of this 10TH day of August, 1994.
EMPLOYER:
THE COMPLETE LOGISTICS COMPANY
By:______[Robert C. Raines ]_____
President
Attest:
____[John B. Yorke ]________
Secretary
(Corporate Seal)
CAROLINA FREIGHT CORPORATION EMPLOYEE
SAVINGS AND PROTECTION PLAN
_______________
TEXT OF PLAN
As Amended Through November 1, 1994
_______________
CAROLINA FREIGHT CORPORATION
North Carolina Highway 150 East
Cherryville, North Carolina 28021
<PAGE>
CAROLINA FREIGHT CORPORATION EMPLOYEE
SAVINGS AND PROTECTION PLAN
(TEXT OF PLAN)
TABLE OF CONTENTS
Page
PREAMBLE ................................................. 1
ARTICLE I. REFERENCES, CONSTRUCTION AND DEFINITIONS ..... 1
1.1 Account ............................................ 2
1.2 Accrued Benefit .................................... 2
1.3 Administrator ...................................... 2
1.4 Affiliate .......................................... 2
1.5 Authorized Leave of Absence ........................ 2
1.6 Before-Tax Contribution ............................ 2
1.7 Before-Tax Subaccount .............................. 2
1.8 Beneficiary ........................................ 2
1.9 Board .............................................. 3
1.10 Break in Service ................................... 3
1.11 Code ............................................... 3
1.12 Committee .......................................... 3
1.13 Company ............................................ 3
1.14 Compensation ....................................... 3
1.15 Deferral Election .................................. 4
1.16 Deferred Retirement ................................ 4
1.17 Disability ......................................... 4
1.18 Disability Retirement .............................. 5
1.19 Early Retirement ................................... 5
1.20 Effective Date ..................................... 5
1.21 Employee ........................................... 5
1.22 Entry Date ......................................... 5
1.23 ERISA .............................................. 5
1.24 Hours of Service ................................... 5
1.25 Investment Funds ................................... 7
1.26 IRS ................................................ 7
1.27 Member ............................................. 7
1.28 Normal Retirement .................................. 7
1.29 Participating Company .............................. 8
1.30 PAYSOP Subaccount .................................. 8
1.31 Plan ............................................... 8
1.32 Plan Administrator ................................. 8
1.33 Plan Year .......................................... 8
1.34 Reemployment Commencement Date ..................... 8
1.35 Regulations ........................................ 8
1.36 Restatement ........................................ 9
1.37 Retirement ......................................... 9
1.38 Rollover Contribution .............................. 9
1.39 Rollover Subaccount ................................ 9
1.40 Service ............................................ 9
1.41 Shares ............................................. 9
1.42 Supplemental Matching Contribution ................. 9
1.43 Supplemental Subaccount ............................ 9
1.44 Surviving Spouse ................................... 9
1.45 Termination of Service ............................. 9
1.46 Trust .............................................. 10
1.47 Trust Agreement .................................... 10
1.48 Trustee ............................................ 10
1.49 Trust Fund ......................................... 10
1.50 Valuation Date ..................................... 10
1.51 Year of Service .................................... 10
ARTICLE II. PARTICIPATION IN THE PLAN ................... 11
2.1 Participation ...................................... 11
2.2 Participation Upon Reemployment. ................... 11
2.3 Responsibility for Share Decisions ................. 11
2.4 Cessation of Membership ............................ 11
ARTICLE III. CONTRIBUTIONS .............................. 12
3.1 Before-Tax Contributions ........................... 12
3.2 Supplemental Matching Contributions. ............... 13
3.3 Rollover Contributions ............................. 13
3.4 Reversion of Contributions ............................ 14
3.5 Company Not Responsible for Adequacy of Trust Fund . 15
ARTICLE IV. TRUST FUND .................................. 15
4.1 Establishment of Investment Funds .................. 15
4.2 Investment of PAYSOP Subaccount .................... 16
4.3 Investment Direction ............................... 16
4.4 Transfers of Investments ........................... 17
4.5 Investment in Life Insurance ....................... 17
4.6 Loans .............................................. 18
ARTICLE V. ALLOCATIONS AND ADJUSTMENTS .................. 18
5.1 Allocations and Adjustments. ....................... 18
5.2 Reports ............................................ 19
5.3 Corrections ........................................ 19
ARTICLE VI. VESTING ..................................... 19
ARTICLE VII. PAYMENT OF BENEFITS ........................ 19
7.1 Entitlement ........................................ 19
7.2 Method of Distribution ............................. 19
7.3 Benefit Commencement ............................... 19
7.4 Medium of Payment .................................. 20
7.5 Applicable Valuation Date .......................... 20
7.6 Distribution of PAYSOP Subaccount .................. 20
7.7 Limitation on Distributions ........................ 21
7.8 Rollover Distribution .............................. 21
ARTICLE VIII. MAXIMUM ACCOUNT ADDITIONS ................. 22
8.1 Application ........................................ 22
8.2 Definitions ........................................ 22
8.3 General Rules ...................................... 24
8.4 Order of Reduction ................................. 24
ARTICLE IX. SPECIAL DISCRIMINATION RULES ................ 25
9.1 Definitions ........................................ 25
9.2 $7,000 Limit on Before-Tax Contributions ........... 27
9.3 ADP Test ........................................... 28
9.4 Special Rules For Determining Average Actual Deferral
Percentage.......................................... 29
9.5 Distribution of Excess ADP Deferrals ............... 30
9.6 Order of Applying Certain Sections of Article ...... 31
ARTICLE X. IN-SERVICE WITHDRAWALS ....................... 31
9.7 Hardship Withdrawals ............................... 31
9.8 Withdrawals After Age 59-1/2 ....................... 33
9.9 Withdrawals from Rollover Subaccount ............... 33
ARTICLE XI. LOANS ....................................... 34
11.1 Authority .......................................... 34
11.2 Loan Application ................................... 34
11.3 Claims Procedure ................................... 34
11.4 Loan Limits ........................................ 34
11.5 Adequate Security .................................. 35
11.6 Interest Rate ...................................... 35
11.7 Repayment .......................................... 35
11.8 Default ............................................ 36
11.9 Foreclosure ........................................ 36
11.10 Withdrawals ........................................ 37
11.11 Loan Investment .................................... 37
ARTICLE XII. TOP HEAVY PROVISIONS ....................... 37
12.1 Application ........................................ 37
12.2 Definitions ........................................ 37
12.3 Determination of Top Heavy Status .................. 39
12.4 Minimum Contribution ............................... 40
12.5 Limitations on Contributions ....................... 40
12.6 Other Plans ........................................ 41
ARTICLE XIII. DESIGNATION OF BENEFICIARIES .............. 41
13.1 Beneficiary Designation ............................ 41
13.2 Failure to Designate Beneficiary ................... 42
ARTICLE XIV. ADMINISTRATION OF THE PLAN ................. 42
14.1 Powers and Duties of the Committee ................. 42
14.2 Powers and Duties of Trustee ....................... 43
14.3 Agents; Report of Committee to Board ............... 43
14.4 Structure of Committee ............................. 43
14.5 Adoption of Procedures of Committee ................ 44
14.6 Instructions for Disbursements ..................... 44
14.7 Claims for Benefits ................................ 44
14.8 Hold Harmless ...................................... 45
14.9 Service of Process ................................. 45
14.10 Investment Adviser ................................. 45
ARTICLE XV. WITHDRAWAL OF PARTICIPATING COMPANY ......... 46
15.1 Withdrawal of Participating Company ................ 46
15.2 Distribution after Withdrawal ...................... 47
15.3 Transfer to Successor Plan ......................... 47
ARTICLE XVI. AMENDMENT OR TERMINATION OF THE PLAN AND TRUST 48
16.1 Right to Amend, Suspend or Terminate Plan .......... 48
16.2 Retroactivity ...................................... 48
16.3 Notice ............................................. 49
16.4 No Further Contributions ........................... 49
16.5 Partial Termination. ............................... 49
ARTICLE XVII. GENERAL LIMITATIONS AND PROVISIONS ........ 50
17.1 All Risks on Members and Beneficiaries ............. 50
17.2 Trust Fund is Sole Source of Benefits .............. 50
17.3 No Right to Continued Employment ................... 50
17.4 Payment on Behalf of Payee ......................... 50
17.5 Nonalienation ...................................... 51
17.6 Missing Payee ...................................... 51
17.7 Required Information ............................... 51
17.8 Subject to Trust Agreement ......................... 52
17.9 Subject to Insurance Contract ...................... 52
17.10 Communications to Committee ........................ 52
17.11 Transfers .......................................... 52
17.12 Communications from Participating Company or Committee 52
17.13 Fees and Expenses .................................. 53
17.14 Voting and Tender or Exchange Rights ............... 53
17.15 Exclusive Benefit of Members and Beneficiaries ..... 54
17.16 Additional Powers of the Committee ................. 54
<PAGE>
CAROLINA FREIGHT CORPORATION EMPLOYEE
SAVINGS AND PROTECTION PLAN
AMENDMENT AND RESTATEMENT EFFECTIVE JANUARY 1, 1989
PREAMBLE
The CAROLINA FREIGHT CORPORATION EMPLOYEE SAVINGS AND PROTECTION PLAN is
designed as an incentive to Employees to make and continue careers with
the Company and other Participating Companies. The Plan provides eligible
Employees the opportunity to regularly set aside a part of their before-
tax Compensation and thereby build additional financial security upon
Retirement or in the event of Disability, death or other Termination of
Service. The Before-Tax Contributions made on behalf of each Member are
invested and accumulated in the Trust Fund free of taxation until
distributed when the Member's employment ends.
The Plan, and the Trust Fund established and maintained as part of the
Plan, are intended to constitute a profit sharing plan and trust with a
"cash or deferred arrangement" which are qualified and exempt from
taxation under Code Sections 401(a), 401(k) and 501(a). The Plan and
Trust are also intended to comply with all applicable requirements of
ERISA. All provisions of the Plan, including the Trust Agreement, shall
be interpreted to comply with the applicable requirements of the Code,
ERISA and the Regulations.
All Trust Fund assets, contributions, income and other additions to the
Trust Fund shall be administered, distributed, forfeited and otherwise
governed by the provisions of the Plan and Trust Agreement.
The Plan originally became effective December 1, 1983. The provisions
of the Plan as contained in this Restatement became effective January 1,
1987, except as otherwise specifically provided with respect to particular
provisions.
Effective August 31, 1987, the Carolina Freight Corporation Payroll-
Based Employee Stock Ownership Plan was merged into this Plan to be
administered in accordance with the terms hereof.
ARTICLE I. REFERENCES, CONSTRUCTION AND DEFINITIONS
Unless otherwise indicated, all references to articles, sections and
subsections shall be to the Plan as set forth in this Restatement. The
Plan and all rights thereunder shall be construed and enforced in
accordance with ERISA and, to the extent that state law is applicable, the
laws of the State of North Carolina. The article titles and the captions
preceding sections and subsections have been inserted solely as a matter
of convenience and in no way define or limit the scope or intent of any
provisions. When the context so requires, the singular includes the
plural. Whenever used herein and capitalized, the following terms shall
have the respective meaning indicated unless the context plainly requires
otherwise.
1 ACCOUNT: The account (including a Before-Tax Subaccount, PAYSOP
Subaccount, Supplemental Subaccount, Rollover Subaccount and any other
subaccount established from time to time under such account) maintained to
record the interest of a Member or Beneficiary in the Trust Fund.
2 ACCRUED BENEFIT: With respect to each Member, the balance in such
Member's Account as of the applicable Valuation Date, following adjustment
thereof as of such Valuation Date as provided in Article V.
3 ADMINISTRATOR: The Employee appointed by the Committee pursuant to
Section 14.1 to perform such administrative duties as the Committee
designates.
4 AFFILIATE: Any entity affiliated with the Company within the
meaning of Sections 414(b), (c) or (m) of the Code or under Regulations
prescribed under Section 414(o) of the Code, except that, for purposes of
applying the provisions of Article VIII and Section 12.5 herein with
respect to limitations on contributions, Section 415(h) of the Code shall
apply.
5 AUTHORIZED LEAVE OF ABSENCE: Either (a) a leave of absence
authorized (pursuant to applicable procedures) by the Company or pertinent
Affiliate under the Company's or Affiliate's personnel practices, provided
that all persons under similar circumstances are treated alike in the
granting of such leaves of absence, and provided further that the Employee
returns within the period specified in the leave of absence, or (b) an
absence required to be considered an Authorized Leave of Absence by
applicable law.
6 BEFORE-TAX CONTRIBUTION: A contribution made by the Participating
Company to the Trust Fund pursuant to a Deferral Election.
7 BEFORE-TAX SUBACCOUNT: The subaccount kept as part of a Member's
Account to account for the Before-Tax Contributions, if any, made on
behalf of the Member, and to account for all income, expenses, gains,
losses and other adjustments allocable to such subaccount.
8 BENEFICIARY: The beneficiary or beneficiaries designated by a
Member pursuant to Article XIII to receive the amount, if any, payable
under the Plan upon the death of such Member, or, where there has been no
such designation or an invalid designation, the individual or entity, or
the individuals or entities, who will receive such amount.
9 BOARD: The Board of Directors of the Company.
10 BREAK IN SERVICE: An applicable computation period, as set forth
in Section 1.51, during which an individual has not completed more than
500 Hours of Service, as determined by the Committee (or its delegate) in
accordance with the Regulations. Solely for purposes of determining
whether a Break in Service has occurred for eligibility purposes, an
individual shall be credited with the Hours of Service in accordance with
Section 1.24 which such individual would have completed but for either (a)
an Authorized Leave of Absence for which such individual is not paid or
entitled to payment or (b) a maternity or paternity absence, as defined in
Section 1.24.
11 CODE: The Internal Revenue Code of 1986, as now in effect or as
hereafter amended. All citations to sections of the Code are to such
sections as they may from time to time be amended or renumbered.
12 COMMITTEE: The "Carolina Freight Corporation Employee Savings and
Protection Plan Committee" appointed by the Board and as provided for in
Article XIV. For purposes of ERISA, the Committee shall be the "plan
administrator" and as such is a named fiduciary of the Plan.
13 COMPANY: Carolina Freight Corporation, a North Carolina
corporation, or any entity which succeeds to its rights and obligations
with respect to the Plan.
14 COMPENSATION: Cash remuneration actually paid by the Participating
Company to an Employee for Service during the Plan Year which constitutes
"wages" within the meaning of Section 3401(a) of the Code plus such
remuneration which, but for the deferral thereof pursuant to Sections 125
and 401(k) of the Code, would have been reported on Form W-2. For Plan
Years beginning on or after January 1, 1989, an Employee's Compensation in
excess of $200,000 (as adjusted upwards from time to time pursuant to Code
Section 415(d)(1)) shall be disregarded.
Notwithstanding any other provision of the Plan to the contrary,
for Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Employee taken into account under the Plan shall not
exceed the OBRA '93 annual Compensation limit. The OBRA '93 annual
Compensation limit is $150,000, as adjusted by the Commissioner for
increases in the cost of living in accordance with section 401(a)(17)(B)
of the Code. The cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which Compensation is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93 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. For Plan Years beginning on or after
January 1, 1994, any reference in this Plan to the limitation under
section 401(a)(17) of the Code shall mean the OBRA '93 annual Compensation
limit set forth in this provision. If Compensation for any prior
determination period is taken into account in determining an employee's
benefits accruing in the current Plan Year, the Compensation for that
prior determination period is subject to the OBRA '93 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, 1994, the OBRA '93 annual
Compensation limit is $150,000.
In determining the Compensation of a Member for purposes of this
limitation, the rules of Code Section 414(q)(6) shall apply, except in
applying such rules, the term "family" shall include only the spouse of
the Member and any lineal descendants of the Member who have not attained
age 19 before the close of the year. If, as a result of the application
of such rules the adjusted $200,000 limitation is exceeded, then the
limitation shall be prorated among the affected individuals in proportion
to each such individual's Compensation as determined under this Section
prior to the application of this limitation.
15 DEFERRAL ELECTION: A Member's written election filed with the
Administrator whereby the Member elects to forgo the receipt of a
specified percentage of Compensation on the condition that the
Participating Company make Before-Tax Contributions in an amount equal to
the amount of Compensation forgone.
16 DEFERRED RETIREMENT: Termination of Service after the Member's
65th birthday, other than on account of death.
17 DISABILITY: A physical or mental condition which totally and
permanently prevents such Employee from performing the regular duties of
the Employee's job with the Participating Company, as the Committee in the
exercise of its sole and absolute discretion shall determine based upon
competent medical evidence satisfactory to the Committee.
18 DISABILITY RETIREMENT: Termination of Service which the Committee
determines, in the exercise of its sole discretion, to be on account of
Disability.
19 EARLY RETIREMENT: Termination of Service, other than on account of
death, on or after a Member's 55th birthday but before such Member's 65th
birthday.
20 EFFECTIVE DATE: The "Effective Date of this Restatement" is
January 1, 1987, except as otherwise specifically provided with respect to
a particular provision. The "Effective Date of the Plan" is December 1,
1983.
21 EMPLOYEE: Except as otherwise provided herein, a person who is a
common law employee of a Participating Company or an Affiliate. In
determining who is an Employee for purposes of this Plan, the following
special provisions shall apply to the extent applicable:
(a) Effective January 1, 1989, each leased employee, within the
meaning of Code Section 414(n), shall be treated as an Employee.
Notwithstanding the foregoing, however, if all such leased Employees
constitute less than 20 percent of the non-highly compensated work
force, as defined in Code Section 414(n)(1)(C)(ii), of the Participating
Company and Affiliates, this Section 1.21 shall not apply to any leased
Employee covered by a retirement plan described in Code Section
414(n)(5).
(b) Each individual who is a nonresident alien and who receives no
income from the Participating Company or an Affiliate which constitutes
income from sources within the United States shall not be treated as an
Employee.
22 ENTRY DATE: With respect to an Employee, the day on which such
Employee enters the membership of the Plan as provided in Section 2.1.
Entry Dates are the January 1, April 1, July 1, and October 1 of each
Plan Year during which the Plan is in effect.
23 ERISA: The Employee Retirement Income Security Act of 1974, as now
in effect or as hereafter amended. All citations to sections of ERISA are
to such sections as they may from time to time be amended or renumbered.
24 HOURS OF SERVICE: Hours of Service shall include (a) each hour for
which an Employee is paid or entitled to payment by the Participating
Company or an Affiliate for Service; (b) each hour for which an Employee
is paid or entitled to payment by the Participating Company for reasons
other than for Service (such as vacation, holiday, illness, incapacity
(including Disability), lay-off, jury duty, military duty or leave of
absence); (c) each hour (to the extent not included in (a) or (b)) for
which back pay (irrespective of mitigation of damages) has been either
awarded or agreed to by the Participating Company or an Affiliate; and
(d) each hour for which an Employee is not actually in Service but is
required to be given credit for Service under any law of the United
States; provided, that in applying paragraph (b) for periods in which an
Employee is not actually in Service, the following special provisions
shall apply:
(1) The number of hours to be credited with respect to any
single continuous period shall be the lesser of: (A) 501 hours, or
(B) the number of hours for which the Employee is paid with respect
to such period;
(2) No hours shall be credited with respect to payments made to
the Employee for the purpose of complying with applicable workers'
compensation, unemployment compensation or disability insurance laws,
or payments solely to reimburse an Employee for medical or medically
related expenses incurred by the Employee; and
(3) An amount paid to an Employee by the Participating Company
or an Affiliate indirectly, such as by a trust, fund or insurer to
which the Participating Company or an Affiliate makes contributions
or pays premiums, shall be deemed to be paid by the Participating
Company or Affiliate.
Notwithstanding the foregoing provisions of this Section 1.24, solely
for the purpose of determining whether an Employee has incurred a Break in
Service, the following special provisions shall apply:
(A) In addition to hours for which an Employee is entitled to
credit under (a) through (d) above, such Employee shall also receive
credit for each hour with respect to the period that such Employee is
on an Authorized Leave of Absence for which such Employee is not paid
or entitled to payment.
(B) An Employee who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service which
would otherwise have been credited to such Employee but for such
absence, or in any case in which such hours cannot be determined, 8
Hours of Service per day of such absence. For purposes of this
paragraph (B), an absence from work for maternity or paternity
reasons means an absence (i) by reason of the pregnancy of the
Employee, (ii) by reason of a birth of a child of the Employee,
(iii) by reason of the placement of a child with the Employee in
connection with the adoption of such child by such Employee, or
(iv) for purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of Service
credited under this paragraph (B) shall be credited with respect to
the computation period in which the absence begins, if the crediting
is necessary to prevent a Break in Service in that Plan Year; in all
other cases, such Hours of Service shall be credited in the following
computation period.
An Employee with respect to whom the Participating Company or Affiliate
maintains records of hours for which payment is made or due shall be
credited with Hours of Service on the basis of such records. Any other
Employee shall be credited with Hours of Service on the basis of 45 hours
for each week such Employee is paid or entitled to payment for any part of
such week. Subject to the provisions of paragraph (B) of this Section
1.24, with respect to any Employee who is entitled to receive credit for
Service for a period such Employee is not paid or entitled to payment,
such Employee shall be credited with 45 Hours of Service for each week or
part thereof during such period. The provisions of this Section 1.24
shall be applied in accordance with the provisions of United States
Department of Labor Regulations Sections 2530.200b-2(b) and (c), which
provisions are incorporated herein by reference.
25 INVESTMENT FUNDS: The separate subfunds of the Trust Fund
maintained for investment purposes, as provided in Article IV.
26 IRS: The United States Internal Revenue Service.
27 MEMBER: With respect to a Plan Year, (a) an Employee who is
enrolled in the Plan as provided in Article II, (b) an Employee who is not
enrolled in the Plan as provided in Article II but has an amount credited
to a Rollover Subaccount as a result of a Rollover Contribution made in
accordance with Section 3.3, and (c) a former Employee who has an Accrued
Benefit for the Plan Year.
28 NORMAL RETIREMENT: Termination of Service, other than on account
of death, on the Member's 65th birthday (the "Normal Retirement age").
29 PARTICIPATING COMPANY: The Company or an Affiliate which, by
action of its board of directors or equivalent governing body and with the
written consent of the Board, has adopted the Plan and Trust Agreement;
provided, that the Board may waive the requirement that such board of
directors or equivalent governing body effect such adoption. By its
adoption of or participation in the Plan, a Participating Company shall be
deemed to appoint the Company its exclusive agent to exercise on its
behalf all of the power and authority conferred by the Plan or by the
Trust Agreement upon the Company and accept the delegation to the
Committee and the Trustee of all the power and authority conferred upon
them by the Plan and the Trust Agreement. The authority of the Company to
act as such agent shall continue until the Plan is terminated as to the
Participating Company and the relevant Trust Fund assets have been
distributed by the Trustee as provided in Articles XV or XVI below. The
term "Participating Company" shall be construed as if the Plan were solely
the Plan of such Participating Company, unless the context plainly
requires otherwise.
30 PAYSOP SUBACCOUNT: The subaccount kept as part of a Member's
Account to account for amounts transferred to the Plan from the former
Carolina Freight Corporation Payroll-Based Employee Stock Ownership Plan
and to account for all income, expenses, gains, losses and other
adjustments allocable to such subaccount. Amounts allocated to a
Participant's PAYSOP Subaccount will remain so allocated as provided in
Code Section 409(g), even though all or part of the employee plan credit
or the credit allowed under former Code Section 41 is recaptured or
redetermined.
31 PLAN: Carolina Freight Corporation Employee Savings and Protection
Plan, as now in effect or as hereafter amended.
32 PLAN ADMINISTRATOR: The Committee.
33 PLAN YEAR: The period beginning on January 1 and ending on the
first December 31 thereafter.
34 REEMPLOYMENT COMMENCEMENT DATE: The date on which an Employee
first performs an Hour of Service after a Break in Service.
35 REGULATIONS: The applicable regulations issued under the Code,
ERISA or other applicable law by the IRS, the Department of Labor or any
other governmental authority, and any temporary or other appropriate and
effective regulations or rules promulgated by such authorities pending the
issuance of such regulations.
36 RESTATEMENT: The text of the Plan as contained in this document
and the Trust Agreement.
37 RETIREMENT: The Member's Normal Retirement, Early Retirement,
Deferred Retirement or Disability Retirement. The term "Retire" means the
act of taking Retirement.
38 ROLLOVER CONTRIBUTION: The contribution an Employee makes to the
Trust Fund pursuant to Section 3.4, and in accordance with Code Section
402(a)(5), of a distribution from a retirement plan qualified under Code
Section 401(a).
39 ROLLOVER SUBACCOUNT: The subaccount kept as part of a Member's
Account to account for Rollover Contributions, if any, made by an Employee
and to account for income, expenses, gains, losses and other adjustments
allocable to such subaccount.
40 SERVICE: Employment with the Participating Company or any
Affiliate, including periods of employment with an Affiliate rendered by
an individual prior to the date the Affiliate became an Affiliate.
Service also includes periods of employment with a predecessor employer as
required by Code Section 414(a) and the Regulations thereunder. Service
may also include any period of a Member's prior employment by any
organization upon such terms and conditions as the Company may approve and
subject to any required IRS approval.
41 SHARES: The common stock issued by the Company or any successor
corporation thereto.
42 SUPPLEMENTAL MATCHING CONTRIBUTION: A contribution meeting the
requirements of Regulation <section> 1.401(k)-1(b)(5), as amended, made by
the Participating Company to the Trust Fund to match Before-Tax
Contributions at such rate and in such amount as the Committee determines
pursuant to Section 3.3 is necessary to meet the ADP Test under Section
9.3.
43 SUPPLEMENTAL SUBACCOUNT: The subaccount kept as part of a Member's
Account (a) to account for the Supplemental Matching Contributions, if
any, made on behalf of the Member and (b) to account for all income,
expenses, gains, losses and other adjustments allocable to such
subaccount.
44 SURVIVING SPOUSE: The survivor of a deceased Member to whom such
deceased Member had been legally married (as determined by the Committee)
immediately before the Member's death.
45 TERMINATION OF SERVICE: A termination of employment with a
Participating Company or an Affiliate as determined by the Committee in
accordance with reasonable standards and policies adopted by the
Committee; provided, however, that the transfer of an Employee from
employment by one Participating Company or an Affiliate to employment by
another Participating Company or Affiliate shall not constitute a
Termination of Service; and provided further that a Termination of Service
shall occur on the earlier of (a) or (b) where:
(a) is the date as of which an Employee quits, is discharged,
Retires or dies, and
(b) is the first day of absence of an Employee who fails to return
to employment at the expiration of an Authorized Leave of Absence.
46 TRUST: The Carolina Freight Corporation Employee Savings and
Protection Plan Trust, created by the Trust Agreement entered into between
the Company and the Trustee.
47 TRUST AGREEMENT: The agreement by and between the Company and the
Trustee, as it may from time to time be amended.
48 TRUSTEE: The entity serving as a trustee under the Trust
Agreement.
49 TRUST FUND: All cash and other assets deposited with or acquired
by the Trustee in its capacity as such hereunder, together with
accumulated income, subject to all liabilities incurred by the Trustee in
its capacity as such and less all disbursements made in respect thereof.
50 VALUATION DATE: The last day of each calendar month of the Plan
Year and any other date during the Plan Year specified by the Committee,
upon or as of which the assets and liabilities of the Trust Fund are
valued and Accounts are adjusted, as prescribed in Article V.
51 YEAR OF SERVICE: With respect to an individual, a Year of Service
shall accrue on the date on which such individual completes at least 1,000
Hours of Service during the applicable computation period of 12
consecutive months. The initial computation period shall begin with the
date the Employee first performs an Hour of Service. If an Employee
incurs a Break in Service before completing a Year of Service, such
Employee's initial computation period shall begin with the Employee's
Reemployment Commencement Date. If the Employee does not complete 1,000
Hours of Service during the initial computation period, subsequent
computation periods shall be each 12 month period beginning January 1 and
ending December 31, beginning with the first January 1 following the date
the Employee first performed an Hour of Service or the Employee's
Reemployment Commencement Date, as the case may be.
ARTICLE II. PARTICIPATION IN THE PLAN
1 PARTICIPATION. Each individual who was a member of the Plan
immediately prior to the Effective Date of this Restatement shall continue
to be enrolled as a Member of the Plan as of such date. Each other
individual who is an Employee on or after the Effective Date of this
Restatement may enroll as a Member of the Plan as of the Entry Date next
following such individual's attainment of age 21 and completion of one
Year of Service, provided, such individual is an Employee on such Entry
Date. Notwithstanding anything hereinabove to the contrary, in no event
shall any individual become a Member if such individual (a) is a leased
employee as defined in Code Section 414(n)(2), (b) is an Employee of an
Affiliate which is not a Participating Company, or (c) irrevocably elects
not to become a Member.
2 PARTICIPATION UPON REEMPLOYMENT.
(A) If an Employee incurs a Termination of Service after satisfying the
age and service requirements in Section 2.1 above but before becoming a
Member and is subsequently reemployed by a Participating Company, such
Employee may enroll in the Plan and become a member on the later of the
date the Employee again performs an Hour of Service or the Entry Date that
was applicable under Section 2.1 above.
(B) If a Member incurs a Termination of Service and is subsequently
reemployed by a Participating Company, such individual shall be eligible
to resume deferring a percentage of Compensation pursuant to such
individual's Deferral Election on the date such individual again performs
an Hour of Service.
3 RESPONSIBILITY FOR SHARE DECISIONS. By participating in the Plan,
each Member shall have accepted the responsibility for exercising the
voting, tender and exchange rights conferred in Section 17.14 with respect
to Shares allocated to the Member's Account.
4 CESSATION OF MEMBERSHIP. The membership of a Member shall end when
no further benefits are payable to such Member or on such Member's account
under the Plan. However, subject to Section 5.1, no contributions shall
be made for the benefit of a Member in the Plan on or after the date on
which such Member has a Termination of Service or otherwise ceases to be
an Employee and before the day, if any, on which the individual next
performs an Hour of Service as an Employee.
ARTICLE III. CONTRIBUTIONS
1 BEFORE-TAX CONTRIBUTIONS.
(a) Subject to the limitations of Articles VIII and IX, the
Participating Company shall make Before-Tax Contributions for each Member
in accordance with the Member's Deferral Election, if any, and this
Section 3.1. The Participating Company shall deliver such Before-Tax
Contributions to the Trustee as soon as practicable after the end of the
payroll period to which they relate, but in no event shall Before-Tax
Contributions for a Plan Year be delivered to the Trustee later than 60
days after the end of such Plan Year.
(b) An Employee may file an initial Deferral Election with the
Administrator at any time, and such Deferral Election shall take effect as
soon as practicable, but not before the Employee's Entry Date. Subject to
Section 10.1(c), a Deferral Election shall remain in effect until
terminated. A Deferral Election may be terminated by the Member by filing
with the Administrator the form provided for that purpose, and the
termination shall take effect as soon as practicable thereafter. After
such a termination, a Member may file a new Deferral Election with the
Administrator at any time, which election will take effect as soon as
practicable after the first Entry Date thereafter. A Deferral Election
shall terminate automatically upon a Member's Termination of Service. A
Member may change the Deferral Election no more often than once a month
and no more than six times during a Plan Year by filing an amendment with
the Administrator, and such amendment shall become effective as soon as
practicable after the filing of the amendment. A Member's Deferral
Election may be terminated at any time, effective as soon as practicable
following the filing with the Administrator of notice of such termination
on the form provided by the Administrator for that purpose.
(c) Each Deferral Election shall state the percentage of Compensation
the Member wishes to forgo. A Member may elect to forgo a percentage of
the Member's Compensation, expressed as a whole percentage, not to exceed
20 percent; provided, however, that any Member for whom 20 percent of
Compensation is greater than the limit specified in Section 9.2(a) and for
whom such limit falls between 2 whole percentages of the Member's
Compensation, may elect an allocation of such limit in lieu of an election
of a whole percentage of Compensation. The deferral percentage, or, if
elected, the amount obtained by dividing the limit by the number of pay
periods in the Plan Year shall apply to each paycheck paid while the
Deferral Election is in effect.
2 SUPPLEMENTAL MATCHING CONTRIBUTIONS. If, as of the last day of
each Plan Year, the "Average Actual Deferral Percentage", as defined in
Section 9.1(b), for all "Highly Compensated Employees", as defined in
Section 9.1(g), for the Plan Year ending on that date exceeds the maximum
percentage which will pass the "ADP Test" set forth in Section 9.3 for
such Plan Year, the Participating Company may make a Supplemental Matching
Contribution to the Plan to be allocated to the Supplemental Subaccount of
each Member who was a "Non-highly Compensated Employee" on such day and
for whom Before-Tax Contributions were made for the Plan Year ending on
that date and who was an Employee or on an Authorized Leave of Absence on
such date or who died or Retired during that year. The Supplemental
Matching Contribution shall equal such amount, which may be a specified
amount or a percentage of compensation, as the Committee determines in its
sole discretion to be necessary to raise the Average Actual Deferral
Percentage of Non-highly Compensated Employees to the lowest percentage
which will cause the Plan to pass the ADP Test for such Plan Year and
shall be allocated based on the Before-Tax Contributions made on the
Member's behalf and not withdrawn under Article X or refunded under
Sections 8.4, 9.2, 9.5 or 9.10 for the Plan Year. Such contributions
shall be fully vested and nonforfeitable and treated as Before-Tax
Contributions for application of the ADP Test under Section 9.3.
3 ROLLOVER CONTRIBUTIONS. An Employee, other than (a) a leased
employee as defined in Code Section 414(n)(2), (b) an Employee of an
Affiliate which is not a Participating Company, or (c) an Employee who
irrevocably elects not to become a Member, shall be permitted to transfer
to the Trust Fund, and the Trustee shall accept, (a) lump sum
distributions received by an Employee from another qualified plan which
are eligible for tax-free rollover to a qualified plan and which are
transferred by the Employee to this Plan within 60 days following such
Employee's receipt thereof; (b) amounts transferred to this Plan from a
conduit individual retirement account provided that the conduit individual
retirement account has no assets other than assets which (1) were
previously distributed to the Employee by another qualified corporate
(and, after December 31, 1983, noncorporate) plan as a lump sum
distribution, (2) were eligible for tax-free rollover to a qualified
corporate or noncorporate plan and (3) were deposited in such conduit
individual retirement account within 60 days of receipt thereof and other
than earnings on said assets; (c) amounts distributed to the Employee from
a conduit individual retirement account meeting the requirements of clause
(b) above and transferred by the Employee to this Plan; and (d) amounts
transferred from another plan in accordance with Section 17.11. Such
transfers shall be subject to the following provisions: (A) prior to
accepting any transfers to which this Section applies, the Committee may
require the Employee to establish that the amounts to be transferred to
this Plan meet the requirements of this Section and may also require the
Employee to provide an opinion of counsel satisfactory to the Committee
that the amounts to be transferred meet the requirements of this Section;
(B) such transfer must satisfy the requirements of Code Section 402(a)(5),
(6), and (7); (C) permission shall be given only if, on advice of legal
counsel for the Participating Company, the transfer will not jeopardize
the status of the Trust Fund as tax-exempt under Code Section 501(a) and
the status of the Plan as qualified under Code Section 401(a); and (D) no
transfer shall be accepted all or a part of which consists of insurance
contracts. All contributions under this Section 3.3 shall be
nonforfeitable.
4 REVERSION OF CONTRIBUTIONS.
(a) QUALIFICATION. Notwithstanding any other provisions herein
contained, this Plan is entered into on the conditions that the Plan and
the Trust Agreement shall be approved initially by the IRS as a qualified
and exempt plan and trust under the provisions of the Code and Regulations
so that contributions to the Trust may be deducted for Federal income tax
purposes, within the limits of the Code and Regulations, and be nontaxable
to Members when contributed. If such initial approval should be denied
for any reason (including failure to comply with any conditions for such
approval imposed by the IRS), contributions made after the execution of
the Trust Agreement and prior to such denial and all assets in the Trust
Fund shall be returned to the Participating Companies, without any
liability to any person, within one year after the date of denial of such
approval.
(b) MISTAKE OF FACT. Notwithstanding any other provisions herein
contained, if any contribution is made due to a mistake of fact, then upon
the direction of the Company, which shall be given in conformity with the
provisions of ERISA, such contribution may be returned to the Company or
the parties who made it, as directed by the Company within one year from
the date made without liability to any person. Earnings of the Plan
attributable to the returned contribution may not be returned, but any
losses attributable thereto must reduce the amount so returned.
(c) DEDUCTION. Notwithstanding any other provisions herein contained,
all contributions are hereby expressly conditioned upon their
deductibility under Section 404 of the Code and Regulations, as amended
from time to time, and if the deduction for any contribution is disallowed
in whole or in part, then such contribution (to the extent the deduction
is disallowed) shall upon direction of the Committee, which shall be given
in conformity with the provisions of ERISA, be returned, without liability
to any person, within one year after such disallowance. Earnings of the
Plan attributable to the returned contribution may not be returned, but
any losses attributable thereto must reduce the amount so returned.
5 COMPANY NOT RESPONSIBLE FOR ADEQUACY OF TRUST FUND. Except as and
if required by applicable law, neither the Board, any Participating
Company, the Committee, any member of the Committee nor the Trustee shall
be responsible for the adequacy of the Trust Fund to meet and discharge
Plan liabilities.
ARTICLE IV. TRUST FUND
1 ESTABLISHMENT OF INVESTMENT FUNDS. All monies, securities or other
property received as contributions under the Plan shall be delivered to
the Trustee under the Trust, to be managed, invested, reinvested and
distributed for the exclusive benefit of the Members and their
Beneficiaries in accordance with the Plan, the Trust Agreement and any
agreement with an insurance company or other financial institution
constituting a part of the Plan and Trust. By written notice to the
Trustee, the Committee may delegate to itself the authority to exercise
investment management responsibilities over all or any portion of the
Trust Fund. The Trustee, at the direction of the Committee, shall cause
to be established or maintain one or more of the following types of
Investment Funds for the investment of the Trust Fund, provided that the
Committee shall have the sole discretion to direct the Trustee to change,
add or eliminate any such funds from time to time.
(a) INCOME FUND. A low risk investment fund, the assets of which
consist primarily of one or more guaranteed income contracts issued by an
insurance company, one or more certificates of deposit issued by a
national bank or savings and loan association, one or more direct
obligations of the United States government or any agency thereof, or one
or more obligations guaranteed as to principal and interest by the United
States government or an agency thereof. It may also include contracts
purchased from a financial institution intended to limit the volatility of
the Plan investment results.
(b) EQUITY FUND. An investment fund with a higher-than-average risk
that consists primarily of such capital, common or other forms of equity
stocks, or securities convertible into common or capital stock as may be
purchased pursuant to the Trust Agreement.
(c) BALANCED FUND. An investment fund with below average risk that
invests primarily in common stocks and fixed income securities.
(d) BOND FUND. An investment fund that consists primarily of fixed
income securities.
(e) GIC FUND. An investment fund that consists primarily of
investments in guaranteed income contracts.
(f) EMPLOYER STOCK FUND. The Investment Fund maintained by the Trustee
which shall consist primarily of Shares of the Company as well as such
amount of cash and cash equivalents as is necessary to manage the fund.
2 INVESTMENT OF PAYSOP SUBACCOUNT. A Member's PAYSOP Subaccount
shall at all times be invested in the Employer Stock Fund, as the former
Carolina Freight Corporation Payroll-Based Employee Stock Ownership Plan
was a plan designed to invest primarily in employer stock.
3 INVESTMENT DIRECTION. A Member may elect, in such manner and form
as the Administrator prescribes, to direct the investment of contributions
allocated to such Member's Before-Tax, Supplemental and Rollover
Subaccounts, after the payment of any insurance premiums as provided in
Section 4.5, in the various Investment Funds established by the Trustee;
provided, however, that a Member may not direct the investment of
contributions in the Employer Stock Fund after December 31, 1990. In the
event an effective investment direction is not made by the Member pursuant
to this Section 4.3, all such contributions shall be invested in the
Income Fund. A Member may direct the investment of such contributions in
multiples of 10 percent of the amount of the contribution, less any amount
used to pay the premiums on any life insurance policy specially allocated
to the Member's Account as provided in Section 4.4 below; provided,
however, that a Member may not direct the investment of more than 30
percent of a contribution in the Employer Stock Fund. All investment
directions given by a Member shall be deemed to be a continuing direction
until changed. A Member may change such Member's investment direction, in
such manner and form as prescribed by the Administrator, no more often
than once a month and no more than six times during a Plan Year, and such
new investment direction shall become effective as soon as practicable
following the receipt by the Administrator of such direction.
4 TRANSFERS OF INVESTMENTS. A Member may elect in such manner and
form as the Administrator prescribes, to transfer amounts in such Member's
Before-Tax, Supplemental and Rollover Subaccounts (but not PAYSOP
Subaccount) into and out of the various Investment Funds; provided,
however, that after December 31, 1990 no amounts may be transferred into
the Employer Stock Fund. The minimum amount that can be transferred out
of any one Investment Fund is 10 percent of the value of the Member's
Account, or if less, the entire amount invested in such Investment Fund.
5 INVESTMENT IN LIFE INSURANCE.
(a) Prior to July 1, 1987, a Member could elect to direct the
investment of his Account in individual or group insurance policies
insuring the life of the Member and the Member's dependents and in group
annuity contracts. New investments in such policies and contracts are not
allowed. With respect to a Member, any such policy or contract shall be
considered earmarked investments of the Member's Account, and premiums for
such policies shall be paid out of the contributions allocated to a
Member's Account, provided that no more than 49.99 percent of the
aggregate amount of Before-Tax and Supplemental Matching Contributions
made on behalf of a Member may be invested in ordinary life insurance
contracts on the life of such Member or such Member's dependents and not
more than 24.99 percent may be invested in term life insurance contracts.
If both ordinary and term life insurance contracts are specifically
allocated to the Member's Account, the sum of the annual term life
insurance premium plus one-half of the ordinary life insurance premium may
not exceed 24.99 percent of the Before-Tax and Supplemental Matching
Contributions made on behalf of such Member for a Plan Year. For purposes
of this Section 4.5, universal life insurance which specifically limits
the current insurance element to no more than 50 percent of the premium
charge shall be considered ordinary life insurance.
(b) The beneficiary of all life insurance policies held in a Member's
Account shall be such Member's Account. Upon the death of a Member's
covered dependent, a death benefit shall be payable to the Member from the
Member's Account in the amount of the excess, if any, of the insurance
proceeds over the cash value of the policy at the date of death of the
insured, subject to the right of the Member to elect to retain such death
benefit in the Member's Account on a form provided by the Administrator
for that purpose.
(c) Dividends payable on any policy or contract specifically allocated
to a Member's Account shall be used to provide additional benefits for the
Member or shall be credited to the Member's Account.
(d) A Member who has a policy allocated to such Member's Account may
not borrow amounts from insurers issuing such policy on the collateral of
such policy. The Committee, however, in its discretion, may borrow
against such policy to fund loans under Article XI.
6 LOANS. A loan to a Member under Article XI shall be from such
Member's Account and shall be considered an earmarked investment of the
Member's Account. A loan to a Member shall reduce the amounts invested in
the Investment Funds on a pro rata basis and shall be charged against each
subaccount invested in each Fund on a pro rata basis. Loan repayments
shall reduce the amount of the loan to the extent it represents principal
and shall be invested in the Investment Funds in accordance with the
Member's then existing investment direction. Repayments shall be credited
first to the Member's Rollover Subaccount and then to the Member's Before-
Tax Subaccount.
ARTICLE V. ALLOCATIONS AND ADJUSTMENTS
1 ALLOCATIONS AND ADJUSTMENTS.
(a) REVALUATION OF TRUST FUND. The assets of the Trust Fund shall be
revalued by the Trustee monthly on the last day of each calendar month,
and in making such revaluation the Trustee shall take into account
earnings or losses of the Trust Fund net of reasonable expenses and
capital appreciation or depreciation in such assets whether or not
realized. The method of revaluation shall be determined by the Trustee,
and shall be followed with reasonable consistency from month to month.
The aggregate amount credited to the Accounts of all Members having
Accounts in the Trust Fund shall be adjusted monthly as of each Valuation
Date so as to be equal to the value of such assets on such date. Before
making the monthly adjustments, the Accounts of Members shall be reduced
by any payments made therefrom during the previous month.
(b) ADJUSTMENT OF ACCOUNTS. The amounts in a Member's Before Tax
Subaccount, PAYSOP Subaccount, Rollover Subaccount and Supplemental
Subaccount shall at all times be separately accounted for by allocating
investment gains and losses, withdrawals, distributions and loans
separately among such subaccounts pro rata on a reasonable and consistent
basis.
2 REPORTS. After completing the allocations provided for in Section
5.1, the Committee shall deliver to the Company a statement which shows
the value of each Account then maintained by the Trustee for a Member, or
where appropriate, for a Beneficiary. The Committee also shall deliver
quarterly to each Participating Company an Account statement for each
Member and, where appropriate, each Beneficiary, which may be forwarded by
the Participating Company to that person and which shows the contributions
to the Account of a Member for the relevant period of the Plan Year and
the then value of that Account.
3 CORRECTIONS. If an error or omission is discovered in any Account,
the Committee shall make such adjustment as it deems necessary to remedy
in an equitable manner such error or omission in such Account not later
than the last day of the Plan Year in which the error or omission is
discovered.
ARTICLE VI. VESTING
A Member shall at all times be fully vested in such Member's Account and
shall at all times have a nonforfeitable right to payment of such Account
in accordance with Article VII.
ARTICLE VII. PAYMENT OF BENEFITS
1 ENTITLEMENT. Upon a Member's Termination of Service, such Member,
or in the event of such Member's death, such Member's Beneficiary, shall
become entitled to such Member's Accrued Benefit. In the event the Member
dies after Termination of Service but prior to payment of such Member's
benefit, such Member's Accrued Benefit shall be paid to such Member's
Beneficiary.
2 METHOD OF DISTRIBUTION. Subject to Section 7.3(a), distribution of
a Member's Accrued Benefit shall be made in one single sum from the Trust
Fund.
3 BENEFIT COMMENCEMENT. The payment of the Accrued Benefit to which
a Member, or, in the event of the Member's death, such Member's
Beneficiary, is entitled shall be made as soon as practicable after such
Member incurs a Termination of Service; provided, however, in no event
shall the payment be made more than 60 days after the end of the calendar
month in which the Member incurs the later of the Member's Termination of
Service or the date the Administrator receives satisfactory evidence of
the Member's death or Disability, if applicable. Notwithstanding the
foregoing, the following special rules shall apply:
(a) If such Member has not reached age 65 and such Member's
Accrued Benefit is more than $3,500 or has ever exceeded $3,500 at the
time of any prior distribution, accelerated distribution may not be made
without such Member's consent. If the Member does not consent to
distribution prior to attaining age 65, then distribution shall be made
as soon as practicable after the close of the Plan Year in which such
Member attains age 65, but in no event later than 60 days following the
close of such Plan Year.
(b) In no event shall distribution of a Member's Accrued Benefit
be made later than the April 1 next following the calendar year in which
the Member attains age 70 1/2 .
4 MEDIUM OF PAYMENT. Distribution of a Member's Accrued Benefit
shall be made entirely in cash; provided, however, that a Member shall
receive an in-kind distribution of any life insurance policy or annuity
contract allocated to such Member's Account, unless such Member elects to
have the policy or contract converted into cash; and provided, further,
that distribution of a Member's PAYSOP Subaccount shall be made entirely
in whole Shares, with the value of any fractional interest in Shares paid
in cash, unless the Member elects to receive such amounts in cash, in
which case the Shares allocated to the Member's PAYSOP Subaccount
immediately prior to the date of distribution shall be converted to cash
and the amount that the Member shall receive is the fair market value of
the Shares as of the date the Shares are converted to cash.
5 APPLICABLE VALUATION DATE. The Accrued Benefit to be distributed
pursuant to this Article VII, excluding any Shares, life insurance
policies or annuity contracts specifically allocated to the Member's
Account which the Member does not elect to receive in cash, shall be based
upon the value of the Member's Account as of the Valuation Date
immediately following the Member's Termination of Service, adjusted for
contributions to and distributions from the Member's Account after that
date and before the date of distribution. Distributions required in
connection with contributions allocated after the distribution of a
Member's Account shall be made as soon as administratively practicable.
6 DISTRIBUTION OF PAYSOP SUBACCOUNT. Notwithstanding any provision
of the Plan to the contrary, in no event shall any distribution of a
Member's PAYSOP Subaccount be made before the end of the 84th month
beginning after the month in which the Shares were originally allocated to
the Member's account under the Carolina Freight Corporation Payroll-Based
Employee Stock Ownership Plan, except in accordance with Code Section
409(d).
7 LIMITATION ON DISTRIBUTIONS. Notwithstanding any other provisions
of this Plan, any distribution from this Plan shall be made in accordance
with the requirements of Code Section 401(a)(9) and Regulations
promulgated under that Section, and such requirements shall take
precedence over any contrary provisions in this Plan.
8 ROLLOVER DISTRIBUTION.
(a) DEFINITIONS. For purposes of this Section 7.8, the following terms
shall have the meaning set forth below.
(1) "Eligible rollover distribution" shall mean any distribution
of all or a portion of the balance to the credit of the distributee,
except that an eligible rollover distribution does not include: (i) any
distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; (ii) any
distribution to the extent such distribution is required under Code
Section 401(a)(9); and (iii) the portion of any distribution that is not
includable in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to employer's securities).
(2) "Eligible retirement plan" shall mean an individual retirement
account described in Code Section 408(a), an individual retirement
annuity described in Code Section 403(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.
(3) "Distributee" shall include 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.
(4) "Direct rollover" shall mean a payment by the Plan to the
eligible retirement plan specified by the distributee.
(b) GENERAL RULE. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit the election of a distributee under
this Section 7.8, a distributee may elect, at the time and in the manner
prescribed by the Committee, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
(C) EFFECTIVE DATE. The provisions of this Section 7.8 shall apply to
distributions made on or after January 1, 1993.
ARTICLE VIII. MAXIMUM ACCOUNT ADDITIONS
1 APPLICATION. The provisions of this Article VIII shall govern
notwithstanding any other provisions of the Plan.
2 DEFINITIONS. For purposes of this Article and as otherwise used in
this Plan, the following terms shall have the meaning set forth below.
(a) "Annual Addition" shall mean the following amounts which, without
regard to this Article, are to be credited to the Member's Account for any
Limitation Year: (1) Employer contributions, (2) Employee contributions,
(3) Forfeitures and (4) amounts allocated after March 31, 1984, to an
individual medical account, as defined in Code Section 415(l)(2) which is
part of a pension or annuity plant maintained by the Employer. Also,
amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account of a
key employee (as defined in Code Section 419A(d)(3)) under a welfare
benefit plan (as defined in Code Section 419(e)) maintained by the
Employer are treated as annual additions; except, however, the limits set
forth in Section 8.3 below shall not apply to (1) any contribution for
medical benefits (within the meaning of Code Section 419A(f)(2)) after
separation from service which is otherwise treated as an annual addition,
or (2) any amount otherwise treated as an annual addition under Code
Section 415(l)(1). "Annual Addition" shall not include, without
limitation, Rollover Contributions.
(b) "Limitation Year" shall mean the 12-month period beginning January
1 and ending the next following December 31.
(c) "415 Compensation" shall mean, as to each Employee, the total
compensation from the Participating Company, including overtime and
bonuses, which is paid to an Employee. For purposes of applying the
limitations under Code Section 404(a), 415 and 416, "415 Compensation"
shall include: wages, salaries, fees for professional services and other
amounts received (without regard to whether or not an amount is paid in
cash) for personal services actually rendered in the course of employment
with the Participating Company maintaining the Plan to the extent that the
amounts are includable in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips, bonuses,
fringe benefits and reimbursements or other expense allowances under a
non-accountable plan (as described in Regulations <section> 1.62-2(c))
paid during the Limitation Year and shall exclude: (1)(A) Participating
Company contributions to a deferred compensation plan to the extent that
the contributions are not includable in the Employee's gross income for
the taxable year in which contributed, (B) Participating Company
contributions made on behalf of the Employee to a simplified employee
pension plan described in Code Section 408(k) to the extent such
contributions are excludable from the Employee's gross income, (C) any
distribution from a plan of deferred compensation; (2) amounts realized
from the exercise of a nonqualified stock option, or amounts realized when
restricted stock (or property) held by an Employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture;
(3) amounts realized from the sale, exchange, or other disposition of
stock acquired under a qualified stock option; and (4) other amounts which
receive special tax benefits or contributions made by the Participating
Company (whether or not under a salary reduction agreement) towards the
purchase of any annuity contract described in Code Section 403(b) (whether
or not the contributions are excludible from the Employee's gross income);
provided, however, 415 Compensation in excess of $200,000 (as such amount
may be adjusted for inflation from time to time for a Limitation Year
under Code Sections 401(a)(17) and 415(d)) in any Limitation Year shall be
disregarded.
(d) "Defined Benefit Plan Fraction" shall mean, as to any Member in any
Limitation Year, a fraction (1) the numerator of which is such Member's
projected annual benefit under a defined benefit plan maintained by the
Participating Company and any other defined benefit plan required to be
aggregated with such plan under Code Section 415(f) (determined as of the
end of the Limitation Year), and (2) the denominator of which is the
lesser of (A) the product of 1.25 times $90,000 (as adjusted upward from
time to time pursuant to Code Section 415(d)), or (B) the product of 1.4
times 100 percent of such Member's highest average 415 Compensation for
the consecutive Limitation Years during which such person has been a
Member of this Plan or a participant in any other defined benefit plan
sponsored by the Participating Company or for any 3 such consecutive
Limitation Years, whichever period is less.
(e) "Defined Contribution Plan Fraction" shall mean, as to any Member
in any Limitation Year, a fraction (1) the numerator of which is the sum
of all Annual Additions to such Member's Account, and all annual additions
(as defined in Code Section 415(c)(2)) to any account of such Member in
any other defined contribution plan required to be aggregated with this
Plan under Code Section 415(f), as of the close of such Limitation Year,
and (2) the denominator of which is the sum of the lesser of the following
amounts determined for such Limitation Year and for each prior Limitation
Year during which the Member was an Employee: (A) the product of 1.25
times $30,000 (or, if greater, one-fourth of the $90,000 limit under Code
Section 415(b)(1)(B) as adjusted upward from time to time for a Limitation
Year under Code Section 415(d)); or (B) the product of 1.4 times 25
percent of the Member's 415 Compensation for each such Limitation Year.
3 GENERAL RULES.
(a) The Annual Addition credited to a Member's Account for any
Limitation Year may not exceed the lesser of (1) $30,000 (or, if greater,
25 percent of the dollar limitation in effect under Section 415(b)(1)(A)
of the Code), or (2) 25 percent of the Member's 415 Compensation for the
Limitation Year.
(b) If a Member is also a participant or was a participant in one or
more defined benefit plans, the sum of such Member's Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction shall not exceed 1.0 for
each Limitation Year.
(c) For purposes of this Article VIII, all defined contribution plans
maintained by the Company and any Affiliate shall be treated as one plan
and all defined benefit plans maintained by the Company and any Affiliate
shall be treated as one plan, as provided in Code Section 415(f).
4 ORDER OF REDUCTION.
(a) Any adjustment required to satisfy the limitations set forth in
Code Section 415 as a result of a Member's participation in another
defined contribution plan or defined benefit plan, shall be made first to
this Plan and then to annual additions under any defined benefit plan
maintained by the Participating Company.
(b) If the Committee determines that the allocation of contributions,
if any, to the Account of a Member will cause the Annual Addition for that
Member to exceed the limitations set forth in Section 8.3 and that an
adjustment under this Plan is required to satisfy Section 8.3, the excess
amounts shall be held unallocated in a suspense account for the Limitation
Year and allocated and reallocated in the next Limitation Year to all of
the Members of the Plan. The excess amounts must be used to reduce
Participating Company contributions for the next Limitation Year (and
succeeding Limitation Years, as necessary) for all of the Members in the
Plan. For purposes of this Section, excess amounts may not be distributed
to a Member or former Member. If the allocation or reallocation of the
excess amounts in a later Limitation Year causes the limitations of Code
Section 415 to be exceeded with respect to each Plan Member for the
Limitation Year, then these amounts must be held unallocated in the
suspense account. If the suspense account is in existence at any time
during a particular Limitation Year other than the Limitation Year
described in the preceding sentence, all amounts in the suspense account
must be allocated and reallocated to the Members' Accounts (subject to the
limitations of Code Section 415) before any Participating Company
contributions which would constitute annual additions may be made to the
Plan for that Limitation Year.
ARTICLE IX. SPECIAL DISCRIMINATION RULES
1 DEFINITIONS. For purposes of this Article and as otherwise used in
this Plan, the following terms shall have the meanings set forth below.
(a) "Actual Deferral Percentage" or "ADP" shall mean the ratio
(expressed as a percentage) of the sum of Before-Tax Contributions and
Supplemental Matching Contributions made for the Plan Year on behalf of an
Employee eligible to enroll in the Plan pursuant to Article II (excluding
any "Excess $7,000 Deferrals" by a "Non-highly Compensated Employee") to
the Member's 415 Compensation for that period of the Plan Year for which
such person is a Member.
(b) "Average Actual Deferral Percentage" shall mean the average
(expressed as a percentage) of the Actual Deferral Percentages of such
Employees in a group. The percentage shall be rounded to the nearest one-
hundredth of one percent (4 decimal places).
(c) "Excess $7,000 Deferrals" shall have the meaning set forth in
Section 9.2.
(d) "Excess ADP Deferrals" shall have the meaning set forth in Section
9.5.
(e) "Family Member" shall mean, with respect to any "Highly Compensated
Employee" who was a 5 percent or more owner of a Participating Company or
one of the 10 highest paid Highly Compensated Employees during the current
Plan Year, the Employee's spouse, a lineal ascendant or descendant, or a
spouse of a lineal ascendant or descendant.
(f) "Highly Compensated Employee" shall mean any Employee who, during
the current or prior Plan Year:
(1) was a 5 percent or more owner of the Participating Company;
(2) received annual compensation from the Participating Company
or an Affiliate in excess of $75,000 for the Plan Year;
(3) received annual compensation from a Participating Company
or an Affiliate in excess of $50,000 for the Plan Year and was among
the "top paid group" (as defined in Code Section 414(q)(4) or the
Regulations thereunder) of Employees during the Plan Year; or
(4) was an officer receiving annual compensation in
excess of 50 percent of the amount specified in Code Section
415(b)(1)(A) for the Plan Year or, if there is not at least one
officer whose annual compensation is in excess of 50% of the
Code Section 415(b)(1)(a) limit, then the highest paid officer.
For this purpose no more than 50 Employees shall be deemed
officers.
For purposes of the definition of "Highly Compensated Employee," the
$50,000 and $75,000 limitations referred to in this Section shall be
adjusted in the same manner as the limitations specified in Code Section
415(b)(1)(A). For purposes of this Section 9.1(f), "annual
compensation" shall mean compensation as defined in Section 12.2(d) of
the Plan, but including amounts contributed by the Employee pursuant to
a salary reduction which are excludable from the Employee's gross income
under Code Section 125, 402(a)(8), 408(h) or 403(b). Finally, the term
"Highly Compensated Employee" shall be determined in accordance with
Section 414(q) of the Code and Regulations thereunder.
(g) "Non-highly Compensated Employee" shall mean an Employee
eligible to participate in the Plan pursuant to Article II who is
neither a Highly Compensated Employee nor a Family Member of a Highly
Compensated Employee.
2 $7,000 LIMIT ON BEFORE-TAX CONTRIBUTIONS.
(a) Notwithstanding any other provision of the Plan to the
contrary, the aggregate of a Member's Before-Tax Contributions during a
calendar year may not exceed $7,000 (as adjusted upwards from time to
time pursuant to Code Section 415(d)). Any Before-Tax Contribution in
excess of the foregoing limits ("Excess $7,000 Deferral"), plus any
income and minus any loss allocable thereto, may be distributed to the
applicable Member no later than April 15 following the Plan Year in
which the Before-Tax Contributions were made.
(b) Any Member who has an Excess $7,000 Deferral during a calendar
year may receive a distribution of the Excess $7,000 Deferral plus any
income or minus any loss allocable thereto, provided (1) the Member
requests the distribution of the Excess $7,000 Deferral, (2) the
distribution occurs after the date the Excess $7,000 Deferral arose, and
(3) the Committee designates the distribution as a distribution of an
Excess $7,000 Deferral. A Member shall be deemed to have notified the
Committee of the Excess $7,000 Deferral if such Member has Excess $7,000
Deferrals for the Plan Year, taking into account Excess $7,000 Deferrals
under plans maintained by the Company or any Affiliates.
(c) If a Member makes a Before-Tax Contribution under this Plan and
in the same calendar year makes a contribution to any other Code Section
401(k) plan containing a cash or deferred arrangement, or a Code Section
408(k) plan (simplified employee pension plan) or Code Section 403(b)
plan (tax-sheltered annuity) and, after the return of any Excess $7,000
Deferral pursuant to Section 9.2(a) and (b), the aggregate of all such
Before-Tax Contributions and other such contributions exceeds the
limitations contained in Code Section 402(g), then such Member may
request that the Committee return all or a portion of the Member's
Before-Tax Contributions for the calendar year plus any income and minus
any loss allocable thereto. The amount by which such Before-Tax
Contributions and other such contributions exceed the Code Section
402(g) limitations will also be known as an Excess $7,000 Deferral. A
Member shall be deemed to have notified the Committee of the Excess
$7,000 Deferral if such Member has Excess $7,000 Deferrals for the Plan
Year, taking into account Excess $7,000 Deferrals under plans maintained
by the Company or any Affiliates.
(d) Any request for a return of Excess $7,000 Deferrals pursuant to
Section 9.2(c) must (1) be made in writing, (2) be submitted to the
Committee not later than the March 1 following the Plan Year in which
the Excess $7,000 Deferral arose, (3) specify the amount of the Excess
$7,000 Deferral, and (4) contain a statement that if the Excess $7,000
Deferral is not distributed, it will, when added to amounts deferred
under other plans or arrangements described in Sections 401(k), 408(k),
or 403(b) of the Code, exceed the limit imposed on the Member by Section
402(g) of the Code for the year in which the Excess $7,000 Deferral
occurred.
(e) Before-Tax Contributions may only be returned to the extent
necessary to eliminate a Member's Excess $7,000 Deferral. Excess $7,000
Deferrals which are returned shall not be treated as Annual Additions
under Article VIII of the Plan. In no event shall the returned Excess
$7,000 Deferrals for a particular calendar year exceed the Member's
aggregate Before-Tax Contributions for such calendar year.
(f) The income or loss allocable to a Before-Tax Contribution that
is returned to a Member pursuant to Section 9.2(a) or (c) shall be
determined in the same manner as provided in Section 5.1.
(g) See Section 10.1(c) for circumstances under which a Member's
maximum annual Before-Tax Contribution could be reduced as a result of
such Member's receiving a hardship distribution.
3 ADP TEST.
(a) The Average Actual Deferral Percentage for Highly Compensated
Employees for each Plan Year and the Average Actual Deferral Percentage
for Non-highly Compensated Employees for the same Plan Year must satisfy
one of the following tests:
(1) The Average Actual Deferral Percentage for Members who are
Highly Compensated Employees for the Plan Year shall not exceed the
Average Actual Deferral Percentage for Members who are Non-highly
Compensated Employees for the Plan Year multiplied by 1.25; or
(2) The excess of the Average Actual Deferral Percentage for
Members who are Highly Compensated Employees for the Plan Year over
the Average Actual Deferral Percentage for Members who are Non-
highly Compensated Employees for the Plan Year is not more than 2
percentage points, and the Average Actual Deferral Percentage for
Members who are Highly Compensated Employees is not more than the
Average Actual Deferral Percentage for Members who are Non-highly
Compensated Employees multiplied by 2.
(b) If at any time during a Plan Year the Committee, as a result of
periodic testing for compliance with the provisions of Section 9.3(a),
determines that the Plan may not comply with such provisions as of the
end of such Plan Year, the Committee, in its discretion, may temporarily
suspend a Highly Compensated Employee's Deferral Election for all or a
portion of such remaining Plan Year and shall promptly notify the Member
of the suspension. If at the end of the Plan Year, the Plan does not
comply with the provisions of Section 9.3(a), the Participating Company
shall distribute Before-Tax Contributions to certain Highly Compensated
Employees as provided in Section 9.5, except as otherwise provided in
the Code or in Treasury Regulations.
4 SPECIAL RULES FOR DETERMINING AVERAGE ACTUAL DEFERRAL
PERCENTAGE.
(a) The Actual Deferral Percentage for any Highly Compensated
Employee for the Plan Year who is eligible to have before-tax
contributions allocated to such person's account under 2 or more
arrangements described in Section 401(k) of the Code that are maintained
by a Participating Company or an Affiliate shall be determined as if
such before-tax contributions were made under a single arrangement.
(b) If 2 or more plans maintained by the Participating Company or
an Affiliate are treated as one plan for purposes of the
nondiscrimination requirements of Code Section 401(a)(4) or the coverage
requirements of Code Section 410(b) (other than for purposes of the
average benefits test), all before-tax contributions that are made
pursuant to those plans (other than an employee stock ownership plan
within the meaning of Code Section 4975(e)(7)) shall be treated as
having been made pursuant to one plan.
(c) For purposes of determining the ADP of a Highly Compensated
Employee who is either a 5 percent or more owner of a Participating
Company or one of the 10 highest paid Highly Compensated Employees
during the Plan Year, the Before-Tax Contributions and 415 Compensation
of such Member shall include the Before-Tax Contributions and 415
Compensation of such person's Family Members. Any person who is a
Family Member shall not be treated as a separate Employee in determining
the Average Actual Deferral Percentage for either Non-highly Compensated
Employees or for Highly Compensated Employees.
(d) The determination and treatment of Before-Tax Contributions and
the Actual Deferral Percentage of any Member shall be in accordance with
such other requirements as may be prescribed from time to time in
Treasury Regulations.
5 DISTRIBUTION OF EXCESS ADP DEFERRALS.
(a) Before-Tax Contributions exceeding the limitations of Section
9.3(a) ("Excess ADP Deferrals") and any income or loss allocable to such
Excess ADP Deferral shall be designated by the Committee as Excess ADP
Deferrals and shall be distributed to Highly Compensated Employees whose
Accounts were credited with Excess ADP Deferrals in the preceding Plan
Year. In determining the amount of Excess ADP Deferrals for each Highly
Compensated Employee, the Committee shall reduce the ADP for each Highly
Compensated Employee as follows:
(1) The ADP for the Highly Compensated Employee(s) with the
highest ADP will be reduced until equal to the second highest ADPs
under the Plan; then
(2) The ADP for the 2 (or more) Highly Compensated Employees
with the highest ADPs under the Plan will be reduced until equal to
the third highest ADP level under the Plan; then
(3) The steps described in (1) and (2) shall be repeated with
respect to the third and successive highest ADP levels under the
Plan until the Plan complies with one or both of the ADP tests
described in Section 9.3(a).
(b) To the extent administratively possible, the Committee shall
distribute all Excess ADP Deferrals and any income or loss allocable
thereto prior to March 15 following the end of the Plan Year in which
the Excess ADP Deferrals arose. In any event, however, the Excess ADP
Deferrals and any income or loss allocable thereto shall be distributed
prior to the end of the Plan Year following the Plan Year in which the
Excess ADP Deferrals arose. Excess ADP Deferrals shall be treated as
Annual Additions under Article VIII of the Plan.
(c) The income or loss allocable to Excess ADP Deferrals shall be
determined in the same manner as provided in Section 5.1.
(d) If an Excess $7,000 Deferral has been distributed to the Member
pursuant to Section 9.2(a) or (b), then any Excess ADP Deferral
allocable to such Member for the same Plan Year shall be reduced by the
amount of such Excess $7,000 Deferral.
(e) The determination and correction of Excess ADP Deferrals of a
Highly Compensation Employee whose ADP is determined under the family
aggregation rule shall be accomplished by reducing the ADP as required
herein, and the Excess ADP Deferrals for the family unit shall then be
allocated among the family members in proportion the Before-Tax
Contributions of each family member that will combine to determine the
group ADP. Notwithstanding the foregoing, with respect to Plan Years
beginning prior to January 1, 1990, compliance with the Regulations then
in effect shall be deemed to be in compliance with this paragraph.
6 ORDER OF APPLYING CERTAIN SECTIONS OF ARTICLE. In applying the
provisions of this Article IX, the determination and distribution of
Excess $7,000 Deferrals shall be made first (to the extent possible) and
the determination and elimination of Excess ADP Deferrals shall be made
second.
ARTICLE X. IN-SERVICE WITHDRAWALS
7 HARDSHIP WITHDRAWALS.
(a) If a Member incurs a financial hardship, such Member may
withdraw, prior to attaining age 59 1/2 , all or a portion of the amount
of such Member's Rollover Subaccount and all or a portion of such
Member's Before-Tax Contributions plus earnings thereon accrued as of
December 31, 1988 (but not the amount of such Member's PAYSOP
Subaccount); provided, however, in no event may a Member withdraw any
amount of such Member's Account which is pledged as security for a loan
pursuant to Section 11.5. A Member shall apply for a hardship
withdrawal on the form provided by the Administrator for such purpose,
including the effective date of the withdrawal which must be at least 15
days prior to the date the form is filed with the Administrator. A
request for withdrawal may not be made more than 4 times during each
Plan Year.
(b) For purposes of this Section 10.1, a financial hardship shall
mean an immediate and heavy financial need experienced by reason of
(1) medical expenses, as described in Code Section 213(d), previously
incurred by the Member, such Member's spouse or any of such Member's
dependents, as defined in Code Section 152; (2) purchase of the Member's
principal residence (other than to make mortgage payments, except as
provided under Section 10.1(b)(4); (3) payment of tuition for the next
12 months of post-secondary education for the Member, such Member's
spouse, children or other dependents, as defined in Code Section 152;
(4) preventing the eviction of the Member from such Member's principal
residence or foreclosure on the mortgage on such residence; or (5) any
other such needs identified by the Commissioner of the IRS and announced
in a publication generally applicable to all taxpayers.
(c) A withdrawal distribution based upon financial hardship cannot
exceed the amount required to meet the immediate financial need created
by the hardship, including the amount of any federal, state or local
income taxes or penalties applicable to the amount of the distribution,
and not reasonably available from other resources of the Member. In
order to ensure compliance with the provisions of this Section 10.1 and
Code Section 401(k) and the Regulations thereunder, the Committee may
require the Member to satisfy any or all of the provisions described in
subsections (1)-(3) below as a condition precedent to receiving a
hardship distribution:
(1) Certification by the Member on the form provided by the
Administrator for such purpose that the financial need cannot be
relieved (A) through reimbursement or compensation by insurance or
otherwise; (B) by reasonable liquidation of the Member's assets; (C)
by cessation of Before-Tax Contributions under the Plan; (D) by
other distributions or nontaxable loans from the Plan or other plans
maintained by the Company or any Affiliate, or any other employer,
or by borrowing from commercial sources on reasonable commercial
terms.
(2) Receipt by the Member of all distributions and nontaxable
loans that such Member is eligible to receive under this Plan and
under any other plan maintained by the Company or an Affiliate.
(3) Automatic suspension of Before-Tax Contributions beginning
on the first payroll period that commences after the date such
Member receives the withdrawal. Before-Tax Contributions on behalf
of such Member may be resumed only after the expiration of at least
12 months from the effective date of the suspension and only after
the Member files a new Deferral Election with the Administrator. In
addition, the maximum Before-Tax Contributions under Section 9.2
that can be made on behalf of a Member for the calendar year
following a hardship distribution shall be reduced by the amount of
Before-Tax Contributions made on behalf of the Member during the
calendar year in which the hardship distribution was made.
(4) Any other condition or method approved by the IRS.
(d) Upon direction by the Committee, the Trustee shall pay the
amount withdrawn on the effective date specified by the Member. For
purposes of the withdrawal, the Member's Account shall be valued as of
the Valuation Date immediately preceding the effective date of the
withdrawal, adjusted for withdrawals and distributions after such date.
Withdrawals shall reduce the Member's investment in the Investment Funds
on a pro rata basis and shall be charged first against a Member's
Rollover Subaccount and then against the Member's Before-Tax Subaccount,
but excluding earnings accrued thereon after December 31, 1988.
(e) The Committee shall be permitted to rely reasonably upon the
representations of the Member of such Member's financial affairs and
shall not be required to conduct an independent investigation of such
representations. Approval of any withdrawal shall be made in an
objective and nondiscriminatory manner by the Committee based only upon
a determination that all relevant facts and circumstances presented by
the Member or discovered by the Committee satisfy the requirements of
both Section 10.1(b) and (c). No other method of approving withdrawals
shall be allowed.
8 WITHDRAWALS AFTER AGE 59-1/2. After reaching age 59 1/2 , a
Member who has been enrolled in the Plan for at least 5 years may
withdraw all or a portion of the amount in such Member's Before-Tax
Subaccount. In addition, a Member who has attained age 59 1/2 but has
been enrolled in the Plan for less than 5 years may withdraw all or a
portion of the amount in the Member's Before-Tax Subaccount that has
been deposited in the Trust Fund for at least 2 years. In no event,
however, may a Member withdraw any amount of such Member's Before-Tax
Subaccount which is pledged as security for a loan pursuant to Section
11.2(c). Withdrawals may be made pursuant to this Section 10.2 without
regard to the restrictions of Section 10.1. The withdrawal shall be
taken on a pro rata basis from each Investment Fund in which the
Member's Before-Tax Subaccount is invested.
9 WITHDRAWALS FROM ROLLOVER SUBACCOUNT. A Member may withdraw
all or a portion of the amount in such Member's Rollover Subaccount that
has been deposited in the Trust Fund for at least two years. In
addition, a Member who has completed 60 months of participation may
withdraw all or a portion of the amount in such Member's Rollover
Subaccount. In no event, however, may a Member withdraw any amount
which is pledged as security for a loan pursuant to Section 11.5. In
order to make such withdrawal, a Member must meet the notice
requirements under Section 10.1(a). The withdrawal shall be taken on a
pro rata basis from each Investment Fund in which the Member's Rollover
Subaccount is invested.
ARTICLE XI. LOANS
1 AUTHORITY. The Committee shall have the discretion to direct
the Trustee to loan money to a Member who is an Employee, a Member who
is a former Employee (if such Member is a party in interest, as defined
in Section 3(14) of ERISA, with respect to the Plan), the Beneficiary of
a deceased Member or an alternate payee under a Qualified Domestic
Relations Order as defined in Section 17.5 (hereinafter referred to in
this Article XI as the "Applicant".) Each such loan shall be treated as
an investment of the Applicant's Account.
2 LOAN APPLICATION. An Applicant who wishes to borrow money
from the Plan shall file a written loan application with the Committee
on the form provided by the Committee for such purpose. The Committee,
in the exercise of its sole discretion, shall approve the loan if the
Committee determines that the loan will not constitute a taxable
distribution from the Plan and, if the Applicant is an Employee, such
Applicant has agreed to repay the loan through payroll deduction. In
exercising its discretion to approve or deny loans, the Committee shall
make loans to all Applicants on a reasonably equivalent basis and shall
not make loans to Highly Compensated Employees, officers, or
shareholders in an amount greater than the amount made available to
other Applicants.
3 CLAIMS PROCEDURE. Loans from the Plan that are denied, except
for the denial of a loan for less than $1,000 under Section 11.4(b),
shall be processed by the Loan Administrator in accordance with the
claims procedure in Section 14.7 of the Plan.
4 LOAN LIMITS.
(a) Loans made pursuant to this Article XI shall be limited to the
lesser of: (1) $50,000 reduced by the highest outstanding loan balance
during the one-year period ending on the day before the loan is made, or
(2) one-half of the Applicant's Accrued Benefit as determined under
Section 5.1 as of the Valuation Date immediately preceding the filing of
the Applicant's loan application; provided, however, in no event shall a
loan exceed the value of the Applicant's Accrued Benefit excluding the
Applicant's PAYSOP Subaccount and any portion of the Applicant's Accrued
Benefit which is invested in life insurance. For purposes of this
Section 11.4, all loans from all plans of the Participating Company or
any Affiliate shall be aggregated. In addition, the Committee may
further limit the amount loaned to any Applicant in order to maintain a
reserve chargeable against the Applicant's Account for income taxes
which would have to be withheld by the Trustee if the loan becomes a
deemed distribution to the Applicant. Any such taxes required to be
withheld by the Trustee (whether or not such reserve has been created)
shall be charged to and reduce the Applicant's Account to the extent
possible, and any excess shall be treated as an administrative expense
of the Plan which shall be reimbursed by such Applicant.
(b) In no event shall a loan be made for less than $1,000.
(c) An Applicant shall not be granted more than one loan per year,
and an Applicant may not borrow from the Plan if such Applicant has
another outstanding loan from the Plan.
5 ADEQUATE SECURITY. Loans shall be adequately secured by the
Applicant's Account and supported by the Applicant's collateral
promissory note for the amount of the loan, made payable to the Trustee;
provided, however, no more than 50 percent of the Applicant's Account,
determined immediately after the origination of the loan, may be pledged
as security for such loan.
6 INTEREST RATE. Loans shall bear interest at a rate determined
by the Committee which is commensurate with the interest rate charged by
persons in the business of lending money for loans made under similar
circumstances. In making such determination, the Committee shall
consider rates charged by commercial lenders in the region in which the
Applicant is located for similar loans, such as secured personal loans,
car loans or home equity loans.
7 REPAYMENT.
(a) Each loan shall be evidenced by a written note, payable to the
Trustee, providing for level amortization with not less than monthly
payments over a fixed period not to exceed 5 years. However, loans used
to acquire any dwelling unit which, within a reasonable time, is to be
used (determined at the time the loan is made) as a principal residence
of the Applicant shall provide for periodic repayment over a reasonable
period of time that may exceed 5 years. Notwithstanding the foregoing,
loans made prior to January 1, 1987 which are used to acquire,
construct, reconstruct or substantially rehabilitate any dwelling unit
which, within a reasonable period of time is to be used (determined at
the time the loan is made) as a principal residence of the Applicant or
a member of such Applicant's family (within the meaning of Code Section
267(c)(4)) may provide for periodic repayment over a reasonable period
of time that may exceed 5 years. The repayment period for each loan
shall be determined by the Administrator in a uniform and
nondiscriminatory manner.
(b) Loans to an Applicant who is an Employee must be repaid by
payroll deduction. Payroll deductions will continue until the earlier
of the date the loan is repaid or the date the Applicant is entitled to
distribution under the terms of the Plan. If such an Applicant has a
Termination of Service and does not receive a distribution of such
Applicant's Account, then the loan shall be repaid in equal monthly
installments for the remaining term of the loan. If such an Applicant's
paychecks from the Participating Company cease for any reason, then the
loan shall be repaid in equal monthly installments for the remaining
term of the loan or until the Applicant begins to receive paychecks in
an amount sufficient to cover the loan. If such an Applicant's paycheck
is ever insufficient to cover the amount of a loan payment, then such
Applicant shall pay the deficiency from outside funds.
(c) If on the date an Applicant's Account becomes payable pursuant
to Article VII of the Plan the Applicant has an outstanding loan
balance, then an amount equal to such loan amount together with accrued
interest shall be deemed immediately due and payable and if not paid
within 30 days, the unpaid balance of the loan will be reported to the
IRS as a distribution of the Account.
8 DEFAULT. An Applicant is not allowed to stop payroll
deductions for repayment of a loan prior to the Applicant's Termination
of Service. An Applicant who is not an Employee or whose paychecks from
the Participating Company have ceased shall be in default on a loan if
such Applicant fails to make a loan payment, as determined by the
Administrator, before the date the next following loan payment becomes
due and payable, and the entire balance of the loan shall become
immediately due and payable; provided, however that in no event shall an
Applicant's Account be applied to repay the loan until the Applicant's
Account is otherwise payable under the terms of the Plan.
9 FORECLOSURE. If the entire balance of an Applicant's loan
becomes immediately due and payable under Section 11.8, the
Administrator shall foreclose, to the extent necessary, on the
collateral held as security for the Applicant's loan as soon as the
Applicant's Account becomes payable under the Plan. The Administrator
may, however, delay such foreclosure, provided the delay
(a) will not cause the Plan to lose any principal or interest,
and
(b) the criteria for such delay are applied by the
Administrator to all similar loans on a reasonably equivalent basis.
10 WITHDRAWALS. As provided in Sections 10.1, 10.2 and 10.3, no
amount held as security for a loan may be withdrawn by an Applicant from
such Applicant's Account while a loan is outstanding, except that such
amounts which otherwise qualify for withdrawal other than on account of
hardship under Sections 10.2 and 10.3 may be withdrawn if immediately
applied to reduce such loan amount.
11 LOAN INVESTMENT. All loans under this Article XI shall be
treated as investments of the Trust. Loans shall be charged pro rata
against such Applicant's subaccounts (excluding the PAYSOP Subaccount).
Interest and principal repayment shall be added to such subaccounts as
provided in Section 4.6.
ARTICLE XII. TOP HEAVY PROVISIONS
1 APPLICATION. The provisions of this Article shall apply to
each Plan Year in which the Plan is Top Heavy and shall supersede any
conflicting provision of this Plan.
2 DEFINITIONS. For purposes of this Article and as otherwise
used in this Plan, the following terms shall have the meanings set forth
below.
(a) "Aggregation Group" means either a Required Aggregation Group
or a Permissive Aggregation Group as determined below:
(1) Each plan of the Company or an Affiliate in which a Key
Employee is a member in the Plan Year containing the Determination
Date or any of the 4 preceding Plan Years, and each other plan of
the Company or an Affiliate which enables any plan in which a Key
Employee participates to meet the requirements of Code Sections
401(a)(4) or 410, will be required to be aggregated. Such group
shall be known as a Required Aggregation Group. In the case of a
Required Aggregation Group, each plan in the group will be
considered Top Heavy if the Required Aggregation Group is a Top
Heavy Group. No plan in the Required Aggregation Group will be
considered Top Heavy if the Required Aggregation Group is not a Top
Heavy Group.
(2) The Company may also include any other plan not required
to be included in the Required Aggregation Group, provided the
resulting group, taken as a whole, would continue to satisfy the
provisions of Code Sections 401(a)(4) and 410. Such group shall be
known as a Permissive Aggregation Group. In the case of a
Permissive Aggregation Group, only a plan that is part of the
Required Aggregation Group will be considered Top Heavy if the
Permissive Aggregation Group is a Top Heavy Group. No plan in the
Permissive Aggregation Group will be considered Top Heavy if the
Permissive Aggregation Group is not a Top Heavy Group.
An Aggregation Group shall include any terminated plan of the
Company or an Affiliate if it was maintained within the last 5 years
ending on the Determination Date.
(b) "Determination Date" shall mean the last day of the Plan Year
immediately preceding the Plan Year for which Top Heavy status is
determined.
(c) "Key Employee" shall mean any Employee or Beneficiary who,
during the Plan Year or the 4 preceding Plan Years was (1) an officer
receiving annual compensation for the Plan Year in excess of 50 percent
of the limit described in Code Section 415(b)(1)(A), (2) one of the 10
Employees owning the largest interest in the Participating Company or an
Affiliate and receiving annual compensation for the Plan Year equal to
or greater than the dollar limit described in Code Section 415(c)(1)(A),
(3) a greater than 5 percent owner of the Participating Company, or (4)
a greater than one percent owner of the Participating Company receiving
annual compensation for the Plan Year in excess of $150,000, or the
Beneficiary of a Key Employee. The Code Section 415(c)(1)(A) limits
referred to in the preceding sentence shall be the specified dollar
limits plus any increases reflecting the cost of living adjustments
specified by the Secretary of the Treasury. For purposes of this
Section 12.2, "annual compensation" means compensation as defined in
Section 12.2(d) below, but including amounts contributed by the Employee
pursuant to a salary reduction agreement which are excludable from the
Employee's gross income under Code Section 125, 402(a)(8), 402(h) or
403(b).
(d) "415 Compensation" shall have the meaning given such term in
Section 8.2(c) of the Plan.
(e) "Non-key Employee" shall mean any Member who is not a Key
Employee.
(f) "Top Heavy Group" shall mean an Aggregation Group in which, as
of the Determination Date, the sum of the present value of the
cumulative accrued benefits of Key Employees under all defined benefit
plans included in the group and the aggregate of the accounts of Key
Employees under all defined contribution plans included in the group
exceeds 60 percent of the sum of the present value of the cumulative
accrued benefits and the aggregate of the accounts of all Key and Non-
key Employees under all plans in the group.
3 DETERMINATION OF TOP HEAVY STATUS. The Plan shall be "Top
Heavy" for the Plan Year if, as of the Valuation Date which coincides
with or immediately precedes the Determination Date, the aggregate of
the Accounts of Key Employees under this Plan exceeds 60 percent of the
aggregate of the Accounts of all Key and Non-Key Employees under this
Plan; provided, however, if the Plan is a member of a Required
Aggregation Group, the Plan shall be Top Heavy for the Plan Year if the
Required Aggregation Group is a Top Heavy Group, unless the Plan is also
a member of a Permissive Aggregation Group that is not a Top Heavy
Group.
In determining the present value of the cumulative accrued benefit
or the amount of an account for an Employee for purposes of this Section
12.3 or Section 12.2(f), the following rules shall apply: All
distributions made during the 5-year period ending on the Determination
Date shall be included, as well as any distributions from any plan
terminated within the 5-year period ending on the Determination Date
that would have been a member of the Required Aggregation Group had it
not been terminated. In addition, for purposes of determining the
amount of an account for any Employee, any unallocated Participating
Company contributions or forfeitures attributable to the Plan Year in
which the Determination Date falls shall also be included. The accrued
benefit or account of any Employee who was at one time a Key Employee
but who was not a Key Employee for any of the 5 Plan Years ending on the
Determination Date and any Employee who has not performed services for
the Participating Company or an Affiliate maintaining a plan in the
Aggregation Group for the 5 Plan Years ending on the Determination Date,
shall be disregarded in determining Top Heavy status. For the purposes
of this subsection, the rollover subaccount maintained under any plan in
the Aggregation Group shall be included in the value of such Employee's
account, except to the extent that the rollover subaccount balance was
received in a transaction consummated after December 31, 1983 which was
initiated by the Employee and the amount received is attributable to a
distribution or transfer from the plan of an employer which is unrelated
to the Participating Company or an Affiliate.
Solely for the purpose of determining if the Plan, or any other plan
included in the Required Aggregation Group, is Top Heavy, a Non-key
Employee's accrued benefit in a defined benefit plan shall be determined
under (A) the method, if any, that uniformly applies for accrual
purposes under all plans maintained by the Participating Company and
Affiliates, or (B) if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate permitted under
the fractional accrual rate of Code Section 411(b)(1)(C).
4 MINIMUM CONTRIBUTION. Except as provided below, for any Plan
Year in which the Plan is Top Heavy, the contributions allocated on
behalf of any Non-key Employee who is an Employee on the Determination
Date shall not be less than the lesser of (a) 3 percent of such Non-key
Employee's 415 Compensation for such Plan Year, or (b) the largest
percentage of Before-Tax and Supplemental Matching Contributions, as a
percentage of the Key Employee's 415 Compensation for the Plan Year,
allocated on behalf of any Key Employee for such Plan Year. The minimum
allocation shall be made even though, under other Plan provisions, the
Non-key Employee would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation, for the Plan
Year because of the Non-key Employee's failure to complete a Year of
Service. In determining whether a Non-key Employee has received the
required minimum allocation, such Non-key Employee's Before-Tax and
Supplemental Matching Contributions shall not be taken into account. If
a Non-key Employee participates in this Plan and a defined benefit plan
included in the Required Aggregation Group, the minimum contribution and
benefit requirements for both plans in a Top Heavy Plan Year may be
satisfied by an allocation of contributions to the Account of each Non-
key Employee in the amount of 5 percent of the Non-key Employee's 415
Compensation for the Plan Year. No minimum allocation shall be required
in this Plan for any Non-key Employee who participates in this Plan and
another defined contribution plan that provides the minimum allocation
and is included with this Plan in a Required Aggregation Group. For the
purpose of determining the appropriate percentage under Section 12.4(b),
all defined contribution plans included in the Required Aggregation
Group shall be treated as one plan.
5 LIMITATIONS ON CONTRIBUTIONS. In any Plan Year in which the
Plan would be Top Heavy if "90 percent" were substituted for "60
percent" where it appears in Sections 12.2(f) and 12.3, "1.0" shall be
substituted for "1.25" as the multiplicand of the dollar limitation in
determining the denominator of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction set forth in Section 8.2(d) and (e)
of this Plan. In any Plan Year in which the Plan is Top Heavy but would
not be Top Heavy if "90 percent" were substituted for "60 percent" as
provided above, "1.0" shall be substituted for "1.25" as the
multiplicand of the dollar limitation in determining the denominator of
the Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction set forth in Section 8.2(d) and (e) of this Plan, unless the
minimum allocation and minimum benefit requirements are satisfied by
substituting "4 percent" for "3 percent" and "7.5 percent" for "5
percent" where such figures appear in Section 12.4(a).
6 OTHER PLANS. The Committee shall, to the extent permitted by
the Code and in accordance with the Regulations, apply the provisions of
this Article by taking into account the benefits payable and the
contributions made under any other plans maintained by the Participating
Company or any of its Affiliates which are qualified under Section
401(a) of the Code to prevent inappropriate omissions or duplication of
minimum benefits or contributions.
ARTICLE XIII. DESIGNATION OF BENEFICIARIES
1 BENEFICIARY DESIGNATION. Every Member shall file with the
Administrator a written designation of one or more persons as the
Beneficiary who shall be entitled to receive the amount, if any, payable
under the Plan upon such Member's death. A Member may from time to time
revoke or change such Member's Beneficiary designation without the
consent of any prior Beneficiary by filing a new designation with the
Administrator. Notwithstanding the foregoing, no designation of a
nonspousal Beneficiary by a Member shall be given effect unless, in
conformity with Section 417(a)(2)(A) of the Code and the Regulations
thereunder, such Member's Surviving Spouse, if any, had consented in
writing to such designation or expressly consented to all future
designations; provided that (a) spousal consent shall not be required
where the spouse cannot be located or on account of such other
circumstances, if any, as are set forth in the Regulations and
(b) spousal consent, if required, must acknowledge the effect of such
designation and be witnessed by a Plan representative or notary public.
The last such designation received by the Administrator shall be
controlling; provided, however, that no designation, or change or
revocation thereof, shall be effective unless received by the
Administrator prior to the Member's death, and in no event shall it be
effective as of a date prior to such receipt. All decisions of the
Administrator concerning the effectiveness of any Beneficiary
designation, and the identity of any Beneficiary, shall be final. If a
Beneficiary shall die after the death of the Member and prior to
receiving the distribution that would have been made to such Beneficiary
had such Beneficiary's death not occurred, and no alternate Beneficiary
has been designated, then for the purposes of the Plan the distribution
that would have been received by such Beneficiary shall be made to the
Beneficiary's estate.
2 FAILURE TO DESIGNATE BENEFICIARY. Subject to Section 13.1, if
no Beneficiary designation is in effect at the time of a Member's death,
the payment of the amount, if any, payable under the Plan upon such
Member's death shall be made to the Member's Surviving Spouse, if any,
or if the Member has no Surviving Spouse, to the Member's estate. If
the Administrator is in doubt as to the right of any person to receive
such amount, the Committee may direct the Trustee to retain such amount,
without liability for any interest thereon, until the rights thereto are
determined, or the Committee may direct the Trustee to pay such amount
without liability for any interest thereon, until the rights thereto are
determined, or the Committee may direct the Trustee to pay any such
amount into any court of appropriate jurisdiction, and such payment
shall be a complete discharge of the liability of the Plan and the Trust
therefor.
ARTICLE XIV. ADMINISTRATION OF THE PLAN
1 POWERS AND DUTIES OF THE COMMITTEE. The Committee which shall
have general responsibility for the administration of the Plan
(including but not limited to complying with reporting and disclosure
requirements, and establishing and maintaining Plan records). In the
exercise of its sole and absolute discretion, the Committee shall
interpret the Plan's provisions and shall determine the eligibility of
individuals for benefits. The Committee shall appoint, with respect to
each Participating Company, an Employee of the Participating Company to
act as Administrator and to perform such duties as designated herein or
by the Committee. The Committee shall also engage such certified public
accountants and other advisers and service providers, who may be
accountants, advisers or service providers for the Company or an
Affiliate, as it shall require or may deem advisable for purposes of the
Plan.
The Committee shall have the power to appoint or remove one or more
investment advisers and to delegate to such adviser authority and
discretion to manage (including the power to acquire and dispose of) the
assets for the Plan, provided that (a) each adviser with such authority
and discretion shall be either a bank, an insurance company or a
registered investment adviser under the Investment Advisers Act of 1940,
and shall acknowledge in writing that it is a fiduciary with respect to
the Plan and (b) the Committee shall periodically review the investment
performance and methods of each adviser with such authority and
discretion.
2 POWERS AND DUTIES OF TRUSTEE. The Trustee shall have
responsibility under the Plan for the management and control of the
assets of the Trust Fund and shall have discretionary responsibility for
the investment and management of such assets, except to the extent that
the Plan and Trust expressly provide that the Trustee is subject to the
direction of the Committee with respect to all or a portion of the Trust
Fund or the direction of a Member with respect to the investment of the
Member's Account in accordance with Section 4.2, in which case the
Trustee shall be subject to proper directions of the Committee or Member
which are made in accordance with the terms of the Plan and are not
contrary to ERISA, and except to the extent that the Trustee is subject
to the direction of an investment adviser pursuant to Section 14.10.
3 AGENTS; REPORT OF COMMITTEE TO BOARD. The Committee may
arrange for the engagement of such legal counsel, who may be counsel for
the Company or an Affiliate, and make use of such agents and clerical or
other personnel as it shall require or may deem advisable for purposes
of the Plan. The Committee may rely upon the written opinion of such
counsel and the accountants engaged by the Committee, and may delegate
to any such agent, or to any subcommittee or member of the Committee its
authority to perform any act hereunder, including, without limitation,
those matters involving the exercise of discretion, provided that such
delegation shall be subject to revocation at any time at the discretion
of the Committee. The Committee shall report to the Board, or to a
committee of the Board designated for that purpose, as frequently as
shall be specified by the Board or such committee, with regard to the
matters for which it is responsible under the Plan.
4 STRUCTURE OF COMMITTEE. The Committee shall consist of 3 or
more members, each of whom shall be appointed by, shall remain in office
at the will of, and may be removed with or without cause by the Board.
Any member of the Committee may resign at any time. No member of the
Committee shall be entitled to act on or decide any matter relating
solely to such member or any of such member's rights or benefits under
the Plan. In the event that the Committee is unable to act in any
matter by reason of the foregoing restriction, the Board shall act on
such matter. The members of the Committee shall not receive any special
compensation for serving in the capacities as members of the Committee
but shall be reimbursed for any reasonable expenses incurred in
connection therewith. Except as otherwise required by ERISA, no bond or
other security need be required of the Committee or any member thereof
in any jurisdiction. Any member of the Committee, any subcommittee or
agent to whom the Committee delegates any authority, and any other
person or group of persons, may serve in more than one fiduciary
capacity (including service both as a trustee and administrator) with
respect to the Plan.
5 ADOPTION OF PROCEDURES OF COMMITTEE. The Committee shall
establish its own procedures and the time and place for its meetings,
and provide for the keeping of minutes of all meetings. A majority of
the members of the Committee shall constitute a quorum for the
transaction of business at a meeting of the Committee. Any action of
the Committee may be taken upon the affirmative vote of a majority of
the members of the Committee at a meeting. The Committee may also act
without meeting by unanimous written consent.
6 INSTRUCTIONS FOR DISBURSEMENTS. All requests or directions
for payment, distribution or disbursement from the Plan shall be signed
by a member of the Committee or such other person or persons as the
Committee may from time to time designate in writing. This person shall
cause to be kept full and accurate accounts of receipts and
disbursements of the Plan, shall cause to be deposited all funds of the
Plan to the name and credit of the Plan in such depositories as may be
designated by the Committee, shall cause to be disbursed the monies and
funds of the Plan when so authorized by the Committee, and shall
generally perform such other duties as may be assigned to such person
from time to time by the Committee.
7 CLAIMS FOR BENEFITS. All claims for benefits under the Plan
shall be submitted in writing to the Committee. Within a reasonable
period of time the Committee shall decide the claim by majority vote in
the exercise of its sole and absolute discretion. Written notice of the
decision on each such claim shall be furnished within 90 days after
receipt of the claim; provided that, if special circumstances require an
extension of time for processing the claim, an additional 90 days from
the end of the initial period shall be allowed for processing the claim,
in which event the claimant shall be furnished with a written notice of
the extension prior to the termination of the initial 90-day period
indicating the special circumstance requiring an extension. If the
claim is wholly or partially denied, such written notice shall set forth
an explanation of the specific findings and conclusions on which such
denial is based. A claimant may review all pertinent documents and may
request a review by the Committee of such a decision denying the claim.
Such a request shall be made in writing and filed with the Committee
within 60 days after delivery to said claimant of written notice of said
decision. Such written request for review shall contain all additional
information which the claimant wishes the Committee to consider. The
Committee may hold any hearing or conduct any independent investigation
which it deems necessary to render its decision, and the decision on
review shall be made as soon as possible after the Committee's receipt
of the request for review. Written notice of the decision on review
shall be furnished to the claimant within 60 days after receipt by the
Committee of a request for review, unless special circumstances require
an extension of time for processing, in which event an additional 60
days shall be allowed for review and the claimant shall be so notified
in writing. Written notice of the decision on review shall include
specific reasons for such decision. For all purposes under the Plan,
such decisions on claims (where no review is requested) and decisions on
review (where review is requested) shall be final, binding and
conclusive on all interest parties as to participation and benefit
eligibility, the Employee's amount of Compensation and as to any other
matter of fact or interpretation relating to the Plan.
8 HOLD HARMLESS. To the maximum extent permitted by law, no
member of the Committee shall be personally liable by reason of any
contract or other instrument executed by such Member or on such Member's
behalf in such Member's capacity as a member of the Committee nor for
any mistake of judgment made in good faith, and the Company shall
indemnify and hold harmless, directly from its own assets (including the
proceeds of any insurance policy the premiums of which are paid from the
Company's own assets), each member of the Committee and each other
officer, employee, or director of the Company or an Affiliate to whom
any duty or power relating to the administration or interpretation of
the Plan or to the management and control of the assets of the Plan may
be delegated or allocated, against any cost or expense (including
counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Company) arising out of any act or
omission to act in connection with the Plan unless arising out of such
person's own fraud or bad faith.
9 SERVICE OF PROCESS. The Secretary of the Company or such
other person designated by the Board shall be the agent for service of
process under the Plan.
10 INVESTMENT ADVISER. If the Committee appoints an investment
adviser pursuant to Section 14.1 with respect to all or a portion of the
Trust Fund, the Trustee shall invest and reinvest such portion of the
Trust Fund only to the extent and in the manner directed by the
investment adviser in writing. In performing its investment duties, the
investment adviser shall have, with respect to such portion of the Trust
Fund, all of the powers of the Trustee provided herein and in the Trust
Agreement. If the Trustee does not receive written instructions from an
investment adviser with respect to such portion of the Trust Fund, the
Trustee shall, after providing notice to the investment adviser, invest
such amounts in short-term securities of the United States or any
instrumentality thereof or in one or more investment companies commonly
known as "money market" funds, and with the consent of the Committee in
a common fund maintained by the Trustee for short-term investments. If
the investment adviser resigns, or is removed, or is no longer a
qualified investment adviser as defined in ERISA, the Trustee shall
reassume complete investment responsibility for such portion of the
Trust Fund unless and until a new qualified investment adviser is
appointed by the Committee.
Unless the Trustee participates knowingly in, or knowingly
undertakes to conceal, an act or omission of the investment adviser,
knowing such act or omission to be a breach of the fiduciary
responsibility of the investment adviser with respect to the Plan, the
Trustee shall not be liable for any act or omission of the investment
adviser and shall not be under any obligation to invest or otherwise
manage the assets of the Plan that are subject to the management of the
investment adviser and, to the maximum extent permitted by ERISA, the
Trustee shall have no liability or responsibility for acting or not
acting in accordance with, any written direction of the investment
adviser. The Company agrees, to the extent permitted by law, to
indemnify the Trustee and hold it harmless from and against any claim or
liability that may be asserted against it, otherwise than on account of
the Trustee's own negligence or willful misconduct, for reason of the
Trustee's taking or refraining from taking any action in accordance with
this Section 14.10.
ARTICLE XV. WITHDRAWAL OF PARTICIPATING COMPANY
1 WITHDRAWAL OF PARTICIPATING COMPANY. Any Participating
Company (other than the Company) may withdraw from participation in the
Plan by giving the Committee and the Trustee prior written notice
approved by resolution by its board of directors specifying a withdrawal
date, which shall be the last day of a month at least 30 days subsequent
to the date which notice is received by the Committee or the Trustee,
whichever receives such notice the latest. A Participating Company
shall withdraw from participating in the Plan if and when it ceases to
be either a division of the Company or an Affiliate. The Committee
shall require any Participating Company to withdraw from the Plan, as of
any withdrawal date specified by the Committee, for the failure of the
Participating Company to make proper contributions or to comply with any
other provision of the Plan and shall require a Participating Company's
withdrawal upon its complete and final discontinuance of contributions.
In the event of any such withdrawal, the Committee shall promptly notify
the IRS and request such determination as counsel to the Plan may
recommend and as the Committee may deem desirable.
2 DISTRIBUTION AFTER WITHDRAWAL. Upon withdrawal from the Plan
by any Participating Company, such Participating Company shall not make
any further contributions under the Plan and no amount shall thereafter
be payable under the Plan to or in respect of any Members then employed
by such Participating Company except as provided in this Article. To
the maximum extent permitted by ERISA, any rights of Members no longer
employed by such Participating Company and of former participants and
their Beneficiaries under the Plan shall be unaffected by such
withdrawal and any transfers, distributions or other dispositions of the
assets of the Plan as provided in this Article shall constitute a
complete discharge of all liabilities under the Plan with respect to
such Participating Company's participation in the Plan and any Member
then employed by such Participating Company.
All determinations, approvals and notifications referred to above
shall be in form and substance and from a source satisfactory to counsel
for the Plan. To the maximum extent permitted by ERISA, the withdrawal
from the Plan by any Participating Company shall not in any way affect
any other Participating Company's participation in the Plan.
3 TRANSFER TO SUCCESSOR PLAN. No transfer of the Plan's assets
and liabilities to a successor employee benefit plan (whether by merger
or consolidation with such successor plan or otherwise) shall be made
unless (a) the Committee authorizes such transfer and (b) each Member
would, if either the Plan or such successor plan then terminated,
receive a benefit immediately after such transfer which (after taking
account of any distributions or payments to them as part of the same
transaction) is equal to or greater than the benefit such Member would
have been entitled to receive immediately before such transfer if the
Plan had then been terminated. The Committee may also request
appropriate indemnification (as permitted by law) from the employer or
employers maintaining such successor plan before making such a transfer.
ARTICLE XVI. AMENDMENT OR TERMINATION OF THE PLAN AND TRUST
1 RIGHT TO AMEND, SUSPEND OR TERMINATE PLAN.
(a) Subject to the provisions of Section 16.1(c), the Board
reserves the right at any time to amend, suspend or terminate the Plan,
any contributions thereunder, the Trust, or any contract issued by an
insurance carrier forming a part of the Plan, in whole or in part, and
for any reason and without the consent of any Participating Company,
Member, Beneficiary, Surviving Spouse or other eligible survivor. Each
Participating Company by its participation in the Plan shall be deemed
to have delegated this authority to the Board. The Plan shall
automatically be terminated upon complete and final discontinuance of
contributions thereunder.
(b) The Committee may adopt any ministerial and nonsubstantive
amendment which may be necessary or appropriate to facilitate the
administration, management and interpretation of the Plan or to conform
the Plan thereto, or to qualify or maintain the Plan and the Trust as a
plan and trust meeting the requirements of Sections 401(a), 401(k) and
501(a) of the Code or any other applicable section of law and the
Regulations issued thereunder, provided said amendment does not have any
material effect on the currently estimated cost to the Company of
maintaining the Plan. Each Participating Company by its participation
in the Plan shall be deemed to have delegated this authority to the
Committee.
(c) No amendment or modification shall be made which would
retroactively (1) reduce, in contravention of section 411(d)(6) of the
Code, any accrued benefits or (2) make it possible for any part of the
funds of the Plan (other than such part as is required to pay taxes, if
any, and administrative expenses as provided in Section 17.13) to be
used for or diverted to any purposes other than for the exclusive
benefit of Member and the Beneficiaries and Surviving Spouses and other
eligible survivors under the Plan prior to the satisfaction of all
liabilities with respect thereto.
2 RETROACTIVITY. Subject to the provisions of Section 16.1
(except Section 16.1(c)(1)), any amendment, modification, suspension or
termination of any provisions of the Plan may be made retroactively if
necessary or appropriate to qualify or maintain the Plan, the Trust and
any contract with an insurance company which may form a part of the Plan
as a plan and trust meeting the requirements of Sections 401(a), 401(k)
and 501(a) of the Code or any other applicable section of law and the
Regulations issued thereunder.
3 NOTICE. Notice of any amendment, modification, suspension or
termination of the Plan shall be given by the Board or the Committee,
whichever adopts the amendment, to the other and to the Trustee and all
Participating Companies.
4 NO FURTHER CONTRIBUTIONS. Upon termination of the Plan or a
complete discontinuance of contributions, no Participating Company shall
make any further contributions under the Plan, and no amount shall
thereafter be payable under the Plan to or in respect of any Member
except as provided in this Article. To the maximum extent permitted by
ERISA, transfers, distributions or other dispositions of the assets of
the Plan as provided in this Article shall constitute a complete
discharge of all liabilities under the Plan. The Committee shall remain
in existence and all of the provisions of the Plan which in the opinion
of the Committee are necessary for the execution of the Plan and the
administration, distribution, transfer or other disposition of the
assets of the Plan in accordance with this Section shall remain in
force.
After (a) appropriate adjustment of the Accounts of Members who are
Employees as of the date of such termination in the manner described in
Section 6.2 for any Forfeitures arising under the Plan prior to such
date and (b) adjustment for profits and losses of the Trust Fund to such
termination date in the manner described in Section 5.1(c), each Account
of a Member who has not received a distribution of the Member's Accrued
Benefit and has not incurred 5 consecutive Breaks in Service as of the
date of such termination shall be fully vested as of such date.
Except as may be prohibited or restricted by Sections 411(a)(11) and
401(k)(10) of the Code and the Regulations thereunder, upon or after the
termination of the Plan, the Board may terminate the Trust and upon such
termination the Trustee shall pay in a single sum to each Member the
full amount credited to such Member's individual Account. Without
limiting the foregoing, any such distributions may be made in cash,
other property, or any combination, as the Committee in its sole
discretion may direct.
All determinations, approvals and notifications referred to above
shall be in form and substance and from a source satisfactory to counsel
for the Plan.
5 PARTIAL TERMINATION. In the event that a "partial
termination" (within the meaning of Section 411(d)(3) of the Code) of
the Plan has occurred then (a) the interest of each affected Member in
such Member's Account as to whom such termination occurred shall
thereupon be nonforfeitable, but shall otherwise be payable as though
such termination has not occurred and (b) the provisions of Sections
16.2, 16.3, 16.4 and Section 15.2 which in the opinion of the Committee
are necessary for the execution of the Plan and the allocation and
distribution of the assets of the Plan shall apply; provided, however,
that the Board, in its discretion, subject to any necessary governmental
approval, may direct that the amounts held in the Accounts of such
Members as to whom such partial termination occurred be segregated by
the Trustee as a separate plan and applied for the benefit of such
Members in the manner described in Section 16.4 above.
ARTICLE XVII. GENERAL LIMITATIONS AND PROVISIONS
1 ALL RISKS ON MEMBERS AND BENEFICIARIES. Each Member and
Beneficiary shall assume all risk in connection with any decrease in the
value of the assets of the Trust Fund and the Members' Accounts. The
Participating Companies and the Committee shall not be liable or
responsible for any decrease in the value of the assets of the Trust and
the Members' Accounts.
2 TRUST FUND IS SOLE SOURCE OF BENEFITS. The Trust Fund shall
be the sole source of benefits under the Plan and, except as otherwise
required by ERISA, the Participating Companies and the Committee assume
no liability or responsibility for payment of such benefits, and each
Member, Beneficiary or other person who shall claim the right to any
payment under the Plan shall be entitled to look only to the Trust Fund
for such payment and shall not have any right, claim or demand therefor
against any Participating Company, the Committee or any member thereof,
or any employee or director of any Participating Company.
3 NO RIGHT TO CONTINUED EMPLOYMENT. Nothing contained in the
Plan shall give any employee the right to be retained in the employment
of the Company or any of its subsidiaries or affiliated or associated
corporations or affect the right of any such employer to dismiss any
employee. The adoption and maintenance of the Plan shall not constitute
a contract between any Participating Company and employee or
consideration for, or an inducement to or condition of, the employment
of any employee.
4 PAYMENT ON BEHALF OF PAYEE. If the Committee shall find that
any person to whom any amount is payable under the Plan is unable to
care for such Member's affairs because of illness or accident, or is a
minor, or has died, then any payment due such Member or such Member's
estate (unless a prior claim therefor has been made by a duly appointed
legal representative) may, if the Committee so elects, be paid to such
Member's spouse, a child, a relative, an institution maintaining or
having custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise
entitled to payment. Any such payment shall be a complete discharge of
the liability of the Plan and the Trust therefor.
5 NONALIENATION. Except insofar as applicable law may otherwise
require or pursuant to a Qualified Domestic Relations Order, as defined
below, no economic interest, expectancy, benefit, payment, claim or
right of any Member or Beneficiary under the Plan and the Trust shall be
subject in any manner to any claims of any creditor of any Member or
Beneficiary, nor to alienation by anticipation, sale, transfer,
assignment, bankruptcy pledge, attachment, charge or encumbrance of any
kind. If any person shall attempt to take any action contrary to this
Section, such action shall be null and void and of no effect, and the
Trustee shall disregard such action and shall not in any manner be bound
thereby and shall suffer no liability on account of its disregard
thereof.
For purposes of the Plan, a "Qualified Domestic Relation Order"
means any judgment, decree or order (including approval of a property
settlement agreement) which has been determined by the Committee in
accordance with procedures established under the Plan to constitute a
qualified domestic relations order within the meaning of Section
414(p)(1) of the Code.
6 MISSING PAYEE. If the Committee cannot ascertain the
whereabouts of any person to whom a payment is due under the Plan, and
if, after 5 years from the date such payment is due, a notice of such
payment due is mailed to the last known address of such person, as shown
on the records of the Committee or the Company, and within 3 months
after such mailing such person has not made written claim therefor, the
Committee, if it so elects, after receiving advice from counsel to the
Plan, may direct that such payment and all remaining payments otherwise
due to such person be canceled on the records of the Plan and the amount
thereof forfeited and applied to reduce the contributions of the
Participating Company that had employed the Member, and upon such
cancellation, the Plan and Trust shall have no further liability
therefor, except that, in the event such person later notifies the
Committee of such person's whereabouts and requests the payment or
payments due to such persons under the Plan, the amounts so applied
shall be paid to such persons as provided herein.
7 REQUIRED INFORMATION. Each Member shall file with the
Committee such pertinent information concerning such Member, such
Member's spouse and such Member's Beneficiary, or such other person as
the Committee may specify, and no Member, or Beneficiary, or other
person shall have any rights or be entitled to any benefits under the
Plan unless such information is filed by or with respect to such Member.
8 SUBJECT TO TRUST AGREEMENT. Any and all rights or benefits
accruing to any persons under the Plan shall be subject to the terms of
the Trust Agreement which the Company shall enter into with the Trustee
providing for the administration of the Trust Fund.
9 SUBJECT TO INSURANCE CONTRACT. If the payment of any benefit
under the Plan is provided for by a contract with an insurance company,
the payment of such benefit shall also be subject to all the provisions
of such contract.
10 COMMUNICATIONS TO COMMITTEE. All elections, designations,
requests, notices, instructions and other communications from a
Participating Company, a Member, Beneficiary or other person to the
Committee required or permitted under the Plan shall be in such form as
is prescribed from time to time by the Committee, shall be mailed by
first class mail or delivered to such location as shall be specified by
the Committee, and shall be deemed to have been given and delivered only
upon actual receipt thereof by the Committee at such location.
11 TRANSFERS. The Plan and Trust may accept funds transferred
to the Plan or Trust from an employee benefit plan qualified under
Section 401(a) of the Code, except that the Plan and Trust may not
accept any amounts transferred from a defined benefit or money purchase
pension plan or any other defined contribution plan subject to the joint
and survivor annuity requirements of Code Section 401(a)(11) and may not
accept, without the approval of the Committee, any transfer that does
not qualify as an elective transfer under Treasury Regulation <section>
1.411(d)-4(A-3(b)), as amended from time to time. Any amounts so
accepted on behalf of a Member shall be held in such Member's Rollover
Subaccount.
12 COMMUNICATIONS FROM PARTICIPATING COMPANY OR COMMITTEE. All
notices, statements, reports and other communications from a
Participating Company or the Committee to any employee, Member,
Surviving Spouse, Beneficiary or other person required or permitted
under the Plan shall be deemed to have been duly given when delivered
to, or when mailed by first class mail, postage prepaid and addressed
to, such employee, Member, Surviving Spouse, Beneficiary or other person
at such Member's address last appearing on the records of the Committee,
or when posted by the Participating Company or the Committee as
permitted by law.
13 FEES AND EXPENSES. The expenses of administering the Plan
including (a) the fees and expenses of any employee and of the Trustee
for the performance of their duties under the Trust, (b) the expenses
incurred by the members of the Committee in the performance of their
duties under the Plan (including reasonable compensation for any legal
counsel, certified public accountants and any agents and cost of
services rendered in respect of the Plan), and (c) all other proper
charges and disbursements of the Trustee or the members of the Committee
(including settlements of claims or legal actions brought against any
party, including the Trustee, approved by the Company and the Committee,
after consulting with counsel to the Plan), are to be paid by the Plan
unless paid in full by the Company. In estimating costs under the Plan,
administrative costs may be anticipated. The members of the Committee
shall not receive any special compensation for serving in their
capacities as members of the Committee.
14 VOTING AND TENDER OR EXCHANGE RIGHTS. Except as otherwise
required by ERISA, the Code and Regulations, all voting rights of Shares
held by the Trust Fund shall be exercised by the Trustee and the Members
or their Beneficiaries in accordance with the following provisions of
this Section:
(a) With respect to all corporate matters submitted to
shareholders, all Shares held in the Trust Fund shall be voted only in
accordance with the directions of the Members as given to the Committee
and communicated in turn by the Committee to the Trustee. Each Member
shall be entitled to direct the voting of only the Shares (including
fractional Shares to 1/100th of a Share) allocated to such Member's
Account, and if this subsection applies to Shares allocated to the
Account of a deceased Member, such Member's Beneficiary shall be
entitled to direct the voting with respect to such Shares as if such
Beneficiary were the Member.
(b) If Members are entitled under Section 17.14(a) to direct the
vote of Shares with respect to a matter, then, before each annual or
special shareholders' meeting of the Company at which the matter is to
be voted, the Company shall furnish to each Member a copy of the proxy
solicitation material sent generally to shareholders, together with a
form requesting instructions on how the Shares with respect to which the
Member has voting rights and responsibility (including fractional Shares
to 1/100th of a Share) are to be voted. Upon timely receipt of such
instructions, the Trustee (after combining votes of fractional Shares to
give effect to the greatest extent possible to Members' instructions)
shall vote the Shares as instructed. Neither the Trustee nor the
Committee shall make recommendations to Members on whether to vote or
how to vote. If voting instructions of any Member are not timely
received for a particular shareholders' meeting, the Shares for which
the Member is responsible shall not be voted.
(c) With respect to any matter as to which voting instructions are
not required to be solicited from Members under Section 17.14(a), the
Trustee shall vote all Shares held in the Trust Fund. Any vote by the
Trustee shall be made in its sole discretion, after it determines such
action to be in the best interests of the Members and their
Beneficiaries.
(d) The Company shall notify each Member of each tender or exchange
offer for the Shares and utilize its best efforts to distribute or cause
to be distributed to each Member in a timely manner all information
distributed to shareholders of the Company in connection with any such
tender or exchange offer. Each Member shall have the right from time to
time with respect to the Shares allocated to such Member's Account
(including fractional Shares to 1/100th of a Share) to instruct the
Trustee in writing as to the manner in which to respond to any tender or
exchange offer which shall be pending or which may be made in the future
for all such Shares or any portion thereof. A Member's instructions
shall remain in force until superseded in writing by the Member. The
Trustee shall tender or exchange whole Shares only as and to the extent
so instructed. If the Trustee shall not receive instructions from a
Member regarding any tender or exchange offer for Shares, the Trustee
shall tender or exchange any Shares allocated to such Member's Account
in the same proportion as the tendering of Shares for which instructions
were received.
(e) If Section 15.17(d) applies to Shares allocated to the Account
of a deceased Member, such Member's Beneficiary shall be entitled to
direct the manner in which to respond to any tender or exchange offer as
if such Beneficiary were the Member.
15 EXCLUSIVE BENEFIT OF MEMBERS AND BENEFICIARIES. In no event
shall any part of the funds of the Plan be used for or diverted to any
purposes other than for the exclusive benefit of Members and their
Beneficiaries under the Plan except as permitted under Section 403(c) of
ERISA. Upon the transfer by a Participating Company of any money to the
Trustee, all interest of the Participating Company therein shall cease
and terminate.
16 ADDITIONAL POWERS OF THE COMMITTEE. Notwithstanding any
provision of the Plan to the contrary, the Committee shall have those
additional powers, rights and obligations provided under the Trust
Agreement.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Plan to be executed
this ____ day of ______________, 1994, to be effective as specified
above.
CAROLINA FREIGHT CORPORATION
By:______________________________
[Corporate Seal] _________ President
ATTEST:
_________________________
__________ Secretary
<PAGE>
*** P R O P O S E D A M E N D M E N T ***
AMENDMENT NO. 1
TO
CAROLINA FREIGHT CORPORATION EMPLOYEE
SAVINGS AND PROTECTION PLAN
THIS AMENDMENT, dated this 1ST day of JULY , 1995;
W I T N E S S E T H:
WHEREAS, pursuant to authorization of the Board of Directors of
WorldWay Corporation (formerly Carolina Freight Corporation, and herein,
the "Corporation"), the Carolina Freight Corporation Employee Savings
and Protection Plan (the "Plan"), a profit sharing plan with a "cash or
deferred arrangement" under the Internal Revenue Code of 1986, as
amended, has heretofore been adopted and, as amended, is now in effect;
WHEREAS, pursuant to Section 16.1 of the Plan, the Corporation has
retained the right to amend the Plan from time to time;
WHEREAS, at the request of the Internal Revenue Service, the
Corporation believes it is necessary and in the best interest of the
participants and beneficiaries of the Plan, and of the Corporation, that
the Plan be amended as provided herein;
WHEREAS, the Internal Revenue Service has approved the adoption of this
amendment in the form contained herein;
NOW, THEREFORE, the Plan is amended effective January 1, 1989 to delete
Section 9.1(f) and substitute the following therefore:
(f) "Highly Compensated Employee" shall mean any Employee who,
during the current or prior Plan Year:
(1) was a 5 percent or more owner of the Participating
Company;
(2) received annual compensation from a Participating
Company or an Affiliate in excess of $75,000 for the Plan Year;
(3) received annual compensation from a Participating
Company or an Affiliate in excess of $50,000 for the Plan Year and
was among the top paid group of Employees during the Plan Year; or
(4) was an officer receiving annual compensation in excess
of 50 percent of the amount specified in Code Section 415(b)(1)(A)
for the Plan Year or, if there is not at least one officer whose
annual compensation is in excess of 50 percent of the Code Section
415(b)(1)(A) limit, then the highest paid officer. For this
purpose no more than 50 Employees (or, if lesser, the greater of 3
Employees or 10 percent of the Employees) shall be deemed
officers.
If an Employee satisfies the definition in clause (2), (3) or (4) in
the Plan Year but does not satisfy clause (2), (3), or (4) during the
prior Plan Year and does not satisfy clause (1) in either Plan Year, the
Employee is a "Highly Compensated Employee" only if such Employee is one
of the 100 most highly compensated Employees for the Plan Year.
An Employee is in the "top-paid group" of Employees for any Plan Year
if the Employee is in the group consisting of the top 20 percent of the
Employees when ranked on the basis of annual compensation paid during
such Plan Year.
For purposes of the definition of "Highly Compensated Employee," the
$50,000 and $75,000 limitations referred to in this Section shall be
adjusted in the same manner as the limitations specified in Code Section
415(b)(1)(A). For purposes of this Section 9.1(f), "annual
compensation" shall mean compensation as defined in Section 12.2(d) of
the Plan, but including amounts contributed by the Employee pursuant to
a salary reduction agreement which are excludable from the Employee's
gross income under Code Sections 125, 402(a)(8), 402(h) or 403(b).
The term "Highly Compensated Employee" also includes any former
Employee who separated from Service (or is deemed to have separated from
Service, as determined under the Regulations) prior to the Plan Year,
performs no Service for the Participating Company during the Plan Year,
and was a "Highly Compensated Employee" either for the separation year
or any Plan Year ending on or after such Employee's 55th birthday.
For purposes of determining whether an Employee is a "Highly
Compensated Employee," Sections 414(b), (c), (m), (n) and (o) of the
Code shall be applied.
Finally, the term "Highly Compensated Employee" shall be determined in
accordance with Section 414(q) of the Code and Regulations thereunder.
<PAGE>
IN WITNESS WHEREOF, WorldWay Corporation has caused this Amendment to
be signed and acknowledged and its corporate seal affixed hereunto, and
the same to be attested, all as of the date first above written.
WORLDWAY CORPORATION
ATTEST: By:________________________________
President
_________________________
Secretary
(SEAL)
<PAGE>
AMENDMENT TO
CAROLINA FREIGHT CORPORATION EMPLOYEE
SAVINGS AND PROTECTION PLAN
WHEREAS, effective December 1, 1983, Carolina Freight Corporation, now
known as WorldWay Corporation (the "Company") adopted the Carolina
Freight Employee Savings and Protection Plan (the "Plan") and the
Carolina Freight Employee Savings and Protection Trust (the "Trust") for
the benefit of its employees, and most recently restated the Plan
effective as of January 1, 1989; and
WHEREAS, effective November 1, 1995, it is desired to amend the Plan
and Trust to allow for investment in the common stock of Arkansas Best
Corporation and effective October 6, 1995, to revise the provisions for
Member directed investments and the limitations on distributions.
NOW, THEREFORE, pursuant to its authority under Section 16.1 of the
Plan, the Company hereby amends the Plan as follows:
1. Effective November 1, 1995, new Sections 1.4.A. and 1.4.B shall be
added to Article I, immediately following existing Section 1.4, and such
new sections shall read as follows:
"1.4.A. "Arkansas Best Stock" shall mean the common stock of
Arkansas Best Corporation, a Delaware corporation, or its successor."
"1.4.B. "Arkansas Best Stock Fund" shall mean the Investment
Fund invested primarily in Arkansas Best Stock as provided in Section
4.5."
2. Effective November 1, 1995, existing Section 1.41, the definition
of Shares shall be deleted in its entirety, Section 1.41 shall be
"reserved" and "Arkansas Best Stock" shall replace the word "Shares" any
and every place the word "Shares" appears.
3. Effective October 6, 1995, existing Section 4.1 shall be deleted
in its entirety and replaced with the following new Section 4.1;
provided, however, that the references to the Arkansas Best Fund shall
be effective November 1, 1995:
"4.1 ESTABLISHMENT OF INVESTMENT FUNDS. All monies, securities
or other property received as contributions under the Plan shall be
delivered to the Trustee under the Trust, to be managed, invested,
reinvested and distributed for the exclusive benefit of the Members
and their Beneficiaries in accordance with the Plan, the Trust
Agreement and any agreement with an insurance company or other
financial institution constituting a part of the Plan and Trust. By
written notice to the Trustee, the Committee may delegate to itself
the authority to exercise investment management responsibilities over
all or any portion of the Trust Fund. The Trustee, at the direction
of the Committee, shall cause to be established or maintain at least
three diversified Investment Funds having materially different risk
and reward characteristics in addition to the Arkansas Best Stock
Fund. The assets of each such Investment Fund may be invested in
shares of a registered investment company, provided that such shares
constitute securities described in Section 401(b)(1) of ERISA.
Moneys in any such Fund in amounts estimated by the Trustee to be
needed for cash withdrawals, inter-Fund transfers or other purposes,
or in amounts too small to be reasonably invested, may be retained by
the Trustee in cash or invested in a manner consistent with such
purposes."
4. Effective October 6, 1995, existing Sections 4.2, 4.3, 4.4 and 4.5
shall be deleted in their entirety and replaced with the following new
Sections 4.2, 4.3, 4.4 and 4.5:
"4.2 INVESTMENT OF PAYSOP SUBACCOUNT. A Member's PAYSOP
Subaccount shall be invested pursuant to Sections 4.3 and 4.4, after
receipt of the proceeds from the sale of Shares pursuant to the
tender offer which caused the Shares to cease to be readily tradable.
4.3 ACCOUNT INVESTMENT DIRECTION. Notwithstanding any other
provision of the Plan or the Trust Agreement with respect to control
over and direction of the investment of assets in the Trust Fund,
each Member may, at such time and in such manner as the Administrator
shall determine pursuant to a uniform policy established by it,
direct that all or any part (subject to such percentage increment
limitations as the Administrator shall determine from time to time)
of the amounts constituting such Member's existing Accounts and his
future contributions be invested among such investment funds as the
Administrator shall offer from time to time ("Investment Funds") for
direction by Members. This Section is intended to meet the
requirements of Section 404(c) of ERISA by allowing each Member to
direct the investment of his individual Accounts.
4.4 TRANSFERS OF INVESTMENTS. At such times as the
Administrator shall permit, and in such manner as the Administrator
shall determine, pursuant to uniform policies established by it, each
Member may (i) direct that all, or any part (subject to such percent
increment limitations as the Administrator shall determine from time
to time) of the amounts in the Member's Accounts which are invested
on his behalf in any of the Investment Funds, be liquidated and the
proceeds thereof reinvested in the other Investment Funds and (ii)
redirect the investment of future contributions (and future earnings
on such amounts). In the event at any time a Member does not elect
to redirect any Account balances or future contributions as provided
for in this Section 4.4, then such Member's prior directions shall
remain in effect.
The Trustee shall carry out the Member's directions or
redirections permitted by this Section 4.4 as soon as
administratively practicable. Notwithstanding the foregoing, in the
event a Member has directed that only part of his interest in any of
the Investment Funds be liquidated and reinvested in one or more of
the other Investment Funds only the nearest value of whole units will
be liquidated and reinvested.
If a Member fails or refuses to exercise any of his investment
direction rights as provided for in this Section 4.4, the Trustee
shall invest all amounts (not otherwise directed) in the lowest risk
Investment Fund available, as determined by the Committee.
The Administrator shall establish and maintain, or cause the
appropriate Trustee to establish and maintain procedures and records
which will adequately reflect the state of each Investment Fund and
the proportionate interest of each Member in each Investment Fund,
including the amount of each Member's various Accounts allocated to
each such Investment Fund.
Shares of stock held in the Arkansas Best Stock Fund shall be
voted in accordance with Section 17.13 below. Any shares of a
registered investment company allocated to a Member's Account shall
be voted in accordance with directions of the Member (or
Beneficiary), with any fractional shares being voted on a combined
basis to the extent possible to reflect the directions of voting
Members. The Trustee or a duly appointed Investment Manager shall be
responsible for the voting of any other securities within an
Investment Fund and the exercise of any tender offer or redemption
rights with respect to any such securities.
"4.5 ARKANSAS BEST STOCK FUND. Effective November 1, 1995, the
Arkansas Best Stock Fund shall be one of the Investment Funds
available for the investment of any portion of a Member's Account in
accordance with Section 4.4. The Arkansas Best Stock Fund may be
partially invested in cash, cash-equivalents, or short-term
investments as needed to meet liquidity requirements, or in amounts
that are too small to reasonably invest in Arkansas Best Stock.
Except as provided above, all assets of the Arkansas Best Stock Fund
shall be invested and reinvested exclusively in Arkansas Best Stock.
All shares of Arkansas Best Stock in the Arkansas Best Stock
Fund shall be voted by the Trustee in such manner as may be directed
by the respective Members, Beneficiaries and Alternate Payees, with
fractional shares being voted on a combined basis to the extent
possible to reflect the direction of the voting Members. In the
event that there is a tender offer or exchange offer for outstanding
shares of Arkansas Best Stock, each Member and Beneficiary shall be
permitted to elect whether shares of Company Stock held in his
Account should be tendered or exchanged. Rights to tender or
exchange with respect to shares allocated to a Member's Account with
respect to which direction has not been received by the Trustee shall
not be tendered or exchanged but shall continue to be held by the
Trust.
Subject to the provisions of the Plan and Trust, the Arkansas
Best Stock Fund may sell shares of Arkansas Best Stock to any person
(including the issuer of such shares), provided that any sale to a
party-in-interest must be made for not less than adequate
consideration. No commission shall be paid with respect to sales or
purchases of Arkansas Best Stock from parties-in-interest. The sale
price for each such share of Arkansas Best Stock sold to a party-in-
interest shall not be less than the price of Arkansas Best Stock,
prevailing at the time of sale, on a national securities exchange
which is registered under section 6 of the Securities Exchange Act of
1934, or, if Arkansas Best Stock is not, at the time of such
purchase, traded on such national securities exchange, shall be not
more than the offering price for the Arkansas Best Stock as
established by the current bid and asked prices quoted by persons
independent of the Company and of any party-in-interest. In the
event that either (i) the sale price per share from the Company as
determined pursuant to the foregoing is less than the then par value
of such Arkansas Best Stock, or (ii) Trustee is of the opinion that
the sale of such shares directly to the Company or a party-in-
interest might involve a possible violation of any federal or state
securities law, or any rule or regulation thereunder, Trustee shall
not sell such shares directly to the Company, but shall sell such
shares in the open market in exchange transactions or in any other
lawful manner.
Notwithstanding anything to the contrary contained in the Plan,
the Administrator may, in its sole discretion, restrict any Plan
transactions involving Arkansas Best Stock to ensure that the
operation of the Plan complies with Rule 16(b)(3), promulgated under
the Securities Exchange Act of 1934, as amended, or any other
applicable securities law."
5. Effective October 6, 1995, existing Section 4.5 shall be
renumbered as Section "4.6."
6. Effective October 6, 1995, existing Section 7.4 shall be deleted
in its entirety and replaced with the following new Section 7.4;
provided however, that should the Internal Revenue Service fail to
approve this portion of the amendment, it shall become void:
"7.4 MEDIUM OF PAYMENT. Distribution of a Member's Accrued
Benefit shall be made entirely in cash, provided, however, that a
Member shall receive an in-kind distribution of any life insurance
policy or annuity contract allocated to such Member's Account, unless
such Member elects to have the policy or contract converted into
cash."
7. Effective October 6, 1995, new Section 7.9 shall be added to
Article VII immediately following existing Section 7.8 and such new
section shall read as follows:
"7.9 DISTRIBUTION LIMITATIONS ON BEFORE-TAX SUBACCOUNT.
Notwithstanding any provisions to the contrary herein, no
distribution shall be made of any Before-Tax Contributions or the
earnings thereon prior to the earliest of:
Separation from service, death, or disability (all as defined in
Code Section 401(k) and the regulations thereunder).
Termination of the Plan without establishment of or maintenance
of another defined contribution plan (other than an employee stock
ownership plan as defined in Code Section 4975(e)(7)), as provided in
Treasury Regulations.
The disposition by the Company of substantially all of the
assets used by such Company in a trade or business of such Company,
as provided in Treasury Regulations.
The disposition by the Company of its interest in a subsidiary,
as provided in Treasury Regulations.
The attainment of age fifty-nine and one-half (59 1/2 ) as
provided in Section 9.8 or the required beginning date under Code
Section 401(a)(9).
Financial hardship pursuant to the provisions of Section 9.7."
8. Effective November 1, 1995, existing Section 17.14 shall be
deleted in its entirety, and Sections 17.15 and 17.16 shall be
renumbered as Sections "17.14" and "17.15," respectively.
IN WITNESS WHEREOF, WORLDWAY CORPORATION has caused this instrument to
be executed by its duly authorized officer on this day of
October, 1995.
WORLDWAY CORPORATION
BY
Title
DII0CD97 25879-9
IDI 401(K) SAVINGS PLAN
Restated Generally Effective as of October 1, 1995
DII0CE3F 25879-6
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION I
PURPOSE AND RESTATEMENT OF THE PLAN
AND ESTABLISHMENT OF THE TRUST FUND ......................... 1
1.1 RESTATEMENT OF THE PLAN. ....................... 1
1.2 PURPOSES. ...................................... 1
1.3 TRUST AGREEMENT. ............................... 1
SECTION II
DEFINITIONS ................................................. 1
SECTION III
REQUIREMENTS FOR ELIGIBILITY ................................ 10
3.1 SERVICE. ....................................... 10
3.2 SERVICE WITH A PREDECESSOR EMPLOYER. ........... 11
3.3 PERIODS OF SEVERANCE. .......................... 11
3.4 CHANGE IN STATUS OF EMPLOYEE. .................. 11
SECTION IV
ACTIVE PARTICIPATION IN THE PLAN ............................ 12
4.1 ACTIVE PARTICIPATION. .......................... 12
4.2 ROLLOVER ACCOUNT. .............................. 12
SECTION V
ADMINISTRATION OF THE PLAN .................................. 13
5.1 RESPONSIBILITY FOR ADMINISTRATION OF THE PLAN. . 13
5.2 APPOINTMENT OF ADMINISTRATIVE COMMITTEE. ....... 13
5.3 RESPONSIBILITY FOR ADMINISTRATION OF THE TRUST FUND. 13
5.4 DELEGATION OF POWERS. .......................... 13
5.5 RECORDS. ....................................... 14
5.6 GENERAL ADMINISTRATIVE POWERS. ................. 14
5.7 APPOINTMENT OF PROFESSIONAL ASSISTANTS AND INVESTMENT
MANAGER......................................... 14
5.8 ACTIONS OF THE ADMINISTRATIVE COMMITTEE. ....... 15
5.9 DIRECTIVES OF THE ADMINISTRATIVE COMMITTEE. .... 15
5.10 DISCRETIONARY ACTS. ............................ 15
5.11 RESPONSIBILITY OF FIDUCIARIES. ................. 16
5.12 INDEMNITY BY PARTICIPATING COMPANIES. .......... 16
5.13 PAYMENT OF FEES AND EXPENSES. .................. 16
5.14 PLAN ADMINISTRATOR. ............................ 17
5.15 ALLOCATION AND DELEGATION OF ADMINISTRATIVE COMMITTEE
RESPONSIBILITIES................................ 17
SECTION VI
DEPOSITS .................................................... 17
6.1 COMPANY MATCHING DEPOSITS. ..................... 17
6.2 BASIC AND SUPPLEMENTAL BEFORE-TAX DEPOSITS. .... 18
6.3 DATE OF PAYMENT OF DEPOSITS. ................... 19
6.4 SPECIAL LIMITATIONS ON BEFORE-TAX DEPOSITS. .... 19
6.5 SPECIAL LIMITATION ON COMPANY MATCHING DEPOSITS. 26
SECTION VII
ALLOCATION TO PARTICIPANTS' ACCOUNTS ........................ 32
7.1 METHODS OF ALLOCATING DEPOSITS. ................ 32
7.2 ALLOCATION TO A PARTICIPANT TRANSFERRED TO A
PARTICIPATING COMPANY........................... 32
7.3 ALLOCATION TO A PARTICIPANT TRANSFERRED TO AN AFFILIATED
COMPANY WHICH HAS NOT ADOPTED THE PLAN.......... 32
7.4 LIMITATIONS ON ANNUAL ADDITIONS. ............... 33
7.5 LIMITATIONS ON ANNUAL ADDITIONS FOR PARTICIPATING
COMPANIES OR AFFILIATED COMPANIES MAINTAINING OTHER
DEFINED CONTRIBUTION PLANS...................... 35
7.6 LIMITATIONS ON BENEFITS AND ANNUAL ADDITIONS FOR
PARTICIPATING COMPANIES OR AFFILIATED COMPANIES
MAINTAINING DEFINED BENEFIT PLANS............... 35
7.7 DEFINITIONS RELATING TO ANNUAL ADDITION LIMITATIONS 35
SECTION VIII
VALUATION OF TRUST FUND ..................................... 37
SECTION IX
PARTICIPANTS' ACCOUNTS ...................................... 38
9.1 SEPARATE ACCOUNTS .............................. 38
9.2 ACCOUNTS OF PARTICIPANTS TRANSFERRED TO AN AFFILIATED
COMPANY......................................... 38
9.3 ADJUSTMENT OF PARTICIPANT'S ACCOUNTS ........... 38
9.4 ACCOUNT INVESTMENT DIRECTION ................... 38
9.5 ARKANSAS BEST STOCK FUND ....................... 40
SECTION X
COMMON TRUST FUND ........................................... 41
SECTION XI
DESIGNATION OF BENEFICIARIES ................................ 41
11.1 PARTICIPANT'S DESIGNATION ...................... 41
11.2 QUALIFIED CONSENT. ............................. 42
11.3 PRIOR PLAN ACCOUNT DEATH BENEFITS .............. 42
SECTION XII
DISABILITY BENEFITS ......................................... 44
12.1 DISABILITY RETIREMENT BENEFITS. ................ 44
12.2 DETERMINATION OF DISABILITY. ................... 45
SECTION XIII
RETIREMENT AND DEATH BENEFITS ............................... 45
13.1 RETIREMENT BENEFITS. ........................... 45
13.2 DEATH BENEFITS. ................................ 45
SECTION XIV
EMPLOYMENT TERMINATION BENEFITS ............................. 46
14.1 VESTING UPON TERMINATION OF EMPLOYMENT. ........ 46
14.2 DETERMINATION OF VESTING YEARS OF SERVICE. ..... 46
14.3 PERIODS OF SEVERANCE. .......................... 46
14.4 FORFEITURE OF NON-VESTED AMOUNT. ............... 47
14.5 RESTORATION OF FORFEITED NON-VESTED AMOUNT. .... 48
SECTION XV
PAYMENT OF BENEFITS ......................................... 49
15.1 AMOUNT OF PAYMENT. ............................. 49
15.2 METHOD OF AND TIME FOR DISTRIBUTION OF BENEFITS. 49
15.3 LIMITATIONS ON TIMING. ......................... 50
15.4 PAYMENTS ON PERSONAL RECEIPT EXCEPT IN CASE OF LEGAL
DISABILITY...................................... 51
15.5 BENEFITS PAYABLE IN CASH. ...................... 51
15.6 DISTRIBUTION ACCOUNTS. ......................... 51
15.7 METHOD OF DISTRIBUTION FOR PRIOR PLAN ACCOUNTS . 51
15.8 DISTRIBUTION LIMITATIONS APPLICABLE TO BEFORE-TAX
DEPOSITS........................................ 52
15.9 BENEFITS PAYABLE PURSUANT TO A QUALIFIED DOMESTIC
RELATIONS ORDER................................. 53
15.10 DIRECT ROLLOVERS. .............................. 53
SECTION XVI
BENEFIT CLAIMS PROCEDURE .................................... 55
16.2 REQUEST FOR REVIEW OF DENIAL. .................. 55
16.3 DECISION ON REVIEW OF DENIAL. .................. 55
SECTION XVII
MISCELLANEOUS PROVISIONS
RESPECTING PARTICIPANTS ..................................... 56
17.1 PARTICIPANTS TO FURNISH REQUIRED INFORMATION. .. 56
17.2 PARTICIPANTS' RIGHTS IN TRUST FUND. ............ 56
17.3 INALIENABILITY OF BENEFITS. .................... 56
17.4 ADDRESS FOR MAILING OF BENEFITS. ............... 59
17.5 UNCLAIMED ACCOUNT PROCEDURE. ................... 59
SECTION XVIII
LOANS TO PARTICIPANTS,
BENEFICIARIES AND ALTERNATE PAYEES .......................... 60
SECTION XIX
ADOPTION OF PLAN BY AFFILIATED COMPANY ...................... 62
SECTION XX
WITHDRAWAL FROM PLAN ........................................ 62
20.1 NOTICE OF WITHDRAWAL. .......................... 62
20.2 SEGREGATION OF TRUST ASSETS UPON WITHDRAWAL. ... 62
20.3 EXCLUSIVE BENEFIT OF PARTICIPANTS. ............. 62
20.4 APPLICABILITY OF WITHDRAWAL PROVISIONS. ........ 63
SECTION XXI
AMENDMENT OF THE PLAN ....................................... 63
SECTION XXII
PERMANENCY OF THE PLAN ...................................... 64
22.1 RIGHT TO TERMINATE PLAN. ....................... 64
22.2 MERGER OR CONSOLIDATION OF PLAN AND TRUST. ..... 64
22.3 CONTINUANCE BY SUCCESSOR COMPANY. .............. 64
SECTION XXIII
DISCONTINUANCE OF DEPOSITS AND TERMINATION .................. 65
23.1 DISCONTINUANCE OF DEPOSITS. .................... 65
23.2 TERMINATION OF PLAN AND TRUST. ................. 65
23.3 RIGHTS TO BENEFITS UPON TERMINATION OF PLAN OR COMPLETE
DISCONTINUANCE OF DEPOSITS...................... 65
SECTION XXIV
STATUS OF EMPLOYMENT RELATIONS .............................. 66
SECTION XXV
BENEFITS PAYABLE BY TRUST ................................... 66
SECTION XXVI
EXCLUSIVE BENEFIT OF TRUST FUND ............................. 66
26.1 LIMITATION ON REVERSIONS. ...................... 66
26.2 UNALLOCATED AMOUNTS UPON TERMINATION OF PLAN AND TRUST.
66
26.3 MISTAKE OF FACT OR DISALLOWANCE OF DEDUCTION. .. 66
26.4 FAILURE OF INITIAL QUALIFICATION OF PLAN AND TRUST. 67
SECTION XXVII
APPLICABLE LAW .............................................. 67
SECTION XXVIII
INTERPRETATION OF THE PLAN AND TRUST ........................ 67
SECTION XXIX
TOP HEAVY PLAN RULES ........................................ 68
29.1 DEFINITIONS. ................................... 68
29.2 DETERMINATION OF TOP HEAVINESS. ................ 70
29.3 MINIMUM REQUIREMENTS. .......................... 72
29.4 MINIMUM BENEFITS FOR EMPLOYERS MAINTAINING DEFINED
BENEFIT PLANS................................... 73
29.5 SUPER TOP HEAVY PLANS. ......................... 73
SECTION XXX
EFFECTIVE DATE .............................................. 73
DII0CE3F 25879-6
<PAGE>
IDI 401(K) SAVINGS PLAN
SECTION 1
PURPOSE AND RESTATEMENT OF THE PLAN
AND ESTABLISHMENT OF THE TRUST FUND
1.1 RESTATEMENT OF THE PLAN. Subject to the terms and conditions
hereinafter set forth, Integrated Distribution, Inc. (the "Sponsoring
Company") hereby amends and restates effective as of October 1, 1995
(except as otherwise provided herein), the IDI 401(k) Savings Plan, a
profit sharing plan for the exclusive benefit of its Employees and their
Beneficiaries, which was originally established effective as of April 1,
1994, and was thereafter amended from time to time. The Plan, as it
existed immediately prior to the execution of this restatement, shall be
referred to herein as the "Prior Plan," even though the Plan continues
without interruption through this restatement.
1.2 PURPOSES. The purposes hereof are to reward Employees for their
long and faithful service, to help the Employees accumulate funds for
their later years, and to provide funds for their Beneficiaries in case of
death.
It is the intention of the Participating Companies that this Plan
shall meet all of the requirements necessary or appropriate to qualify as
a profit-sharing plan under Sections 401(a) and 401(k) of the Code and
that the Fund made a part hereof shall be exempt from tax under Section
501(a) of the Code and all provisions hereof shall be interpreted
accordingly. Contributions may be made hereunder without regard to
whether the Sponsoring Company or the Participating Companies have
profits.
1.3 TRUST AGREEMENT. In furtherance of this Plan, the Sponsoring
Company, effective as of May 1, 1995, has entered into the Arkansas Best
Corporation Employees' Investment Trust No. 1 ("Investment Trust"), which
supersedes all prior trust agreements relating to the Plan; such Trust
Agreement is made a part hereof, for the purpose of carrying out the
provisions of this Plan as hereinafter set forth.
SECTION 2
DEFINITIONS
As used in the Plan:
2.1 "Account" or "Accounts" shall mean the Basic Before-Tax Deposit
Account, if any; the Supplemental Before-Tax Deposit Account, if any; the
Company Matching Deposit Account; the Prior Plan Account, if any; and the
Rollover Account, if any, collectively or singly as the context requires,
maintained for each Participant under the Plan.
2.2 "Active Participant" shall mean a Participant who has currently
elected in accordance with the provisions of Section hereof to have Basic
Before-Tax Deposits made on his behalf, pursuant to the provisions of
Section hereof.
2.3 "Administrative Committee" shall mean the persons or entity
appointed to administer the Plan in accordance with the provisions of
Section . The Administrative Committee shall be the "Named Fiduciary" as
referred to in Section 402(a) of ERISA with respect to the management,
operation and administration of the Plan.
2.4 "Affiliated Company" shall mean any company which is a component
member of a controlled group of corporations within the meaning of Section
1563(a) of the Code determined without regard to Sections 1563(a)(4) and
(e)(3)(C) thereof, which controlled group of corporations includes as a
component member the Sponsoring Company or any Participating Company,
except that with respect to Section hereof, "50 per cent" shall be
substituted for "80 per cent" where it appears in paragraph 1 of Section
1563(a) of the Code. The term "Affiliated Company" shall also mean any
trade or business under common control (as defined in Sections 414(b) and
414(c) of the Code) with a Participating Company and any member of an
affiliated service group (as defined in Section 414(m) of the Code) of
which a Participating Company is a member and any entity required to be
aggregated with a Participating Company pursuant to regulations under
Section 414(o) of the Code.
2.5 "Arkansas Best Stock" shall mean the common stock of Arkansas
Best Corporation, a Delaware corporation, or its successor.
2.6 "Arkansas Best Stock Fund" shall mean the Investment Fund
invested primarily in Arkansas Best Stock as provided in Section .
2.7 "Basic Before-Tax Deposit Account" shall mean the separate
account maintained for each Participant reflecting the Basic Before-Tax
Deposits made on behalf of such Participant, as adjusted in accordance
with the provisions of Section .
2.8 "Basic Before-Tax Deposits" shall mean the amount each Active
Participant has elected to have the Participating Companies contribute on
his behalf pursuant to the provisions of Section hereof which is subject
to a Company Matching Deposit. Such amounts shall qualify as elective
contributions under Section 401(k) of the Code and the regulations
thereunder.
2.9 "Before-Tax Deposits" shall mean, collectively or singly as the
context requires, a Participant's Basic Before-Tax Deposits, if any, and
his Supplemental Before-Tax Deposits, if any.
2.10 "Beneficiary" shall mean any person entitled to receive benefits
which are payable upon or after a Participant's death pursuant to Section
and Section .
2.11 "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time. References to any Section of the Internal Revenue Code
shall include any successor provision thereto.
2.12 "Company Matching Deposit Account" shall mean the separate
account maintained for each Participant reflecting such Participant's
allocable share of the Company Matching Deposits under Subsection hereof,
as adjusted in accordance with the provisions of Section .
2.13 "Company Matching Deposits" shall mean the amount of the
Participating Companies' contributions provided for in Subsection hereof
which match the Participant's Basic Before-Tax Deposits.
2.14 "Compensation" shall mean, subject to the provisions of
Subsection hereof, the amounts actually paid to an Employee by the
Participating Company for services rendered, inclusive of bonuses,
commissions and overtime pay, and amounts, if any, that would have been
included in the Employee's Compensation for such calendar year if they had
not received special tax treatment because they were deferred by the
Employee through a plan of deferred compensation under Section 401(k) of
the Code or under a salary reduction agreement pursuant to Section 125 of
the Code, but exclusive of expense allowances and all other extraordinary
compensation and any Compensation paid for any period prior to the Entry
Date on which a Participant first becomes a Participant under the Plan.
Notwithstanding the foregoing, "Compensation" shall not include any
Compensation in excess of One Hundred Fifty Thousand Dollars ($150,000) or
such larger amount as results from the adjustment provided in Section
401(a)(17) of the Code.
2.15 "Eligible Employee" shall mean each Employee who is employed by
a Participating Company except the following individuals:
2.15.1 any person who is a "casual employee" of a
Participating Company as defined by the Participating Company's
uniform and nondiscriminatory employment policy, unless and until such
"casual employee" completes a Vesting Year of Service as defined in
Section hereof, in which event such causal employee shall be treated
as an Eligible Employee as defined herein as of the date such casual
employee completes the Vesting Year of Service.
2.15.2 any person who is included in a collective bargaining
unit, if retirement benefits were the subject of good faith
bargaining, unless and until said bargaining unit has bargained for
coverage under the Plan, in which event such person shall be treated
as an Employee as defined herein as of the date said bargaining unit
commences coverage under this plan.
2.15.3 any person who is not treated as an employee on the
payroll of a Participating Company, regardless of whether such person
is considered a leased employee within the meaning of Code Sections
414(n) and 414(o).
2.16 "Employee" shall mean any person who is employed as a common-law
employee by an Affiliated Company and receives a compensation from an
Affiliated Company that is subject to FICA tax. Any leased employee shall
be considered al "Employee" under the Plan to the extent required by
Sections 414(n) or 414(o) of the Code, but shall not be eligible to
participate in the Plan unless and until he actually becomes employed on
the payroll of a Participating Company and otherwise meets the eligibility
criteria of Section hereof.
2.17 "Employment Commencement Date" shall mean the date an Employee
first performs an Hour of Service with a Participating Company or an
Affiliated Company.
2.18 "Entry Date" shall mean any business day.
2.19 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time. References to any Section of ERISA
shall include any successor provision thereto.
2.20 "Hour of Service" shall mean each hour for which an Employee is
directly or indirectly paid, or entitled to payment by a Participating
Company or an Affiliated Company for the performance of duties
2.21 "Inactive Participant" shall mean any Participant other than an
Active Participant.
2.22 "Investment Manager" shall mean any party that (i) is either (a)
registered as an investment adviser under the Investment Advisers Act of
1940, or (b) a bank (as defined in the Investment Advisers Act of 1940),
or (c) an insurance company qualified to manage, acquire or dispose of
Plan assets under the laws of more than one State, (ii) acknowledges in
writing that it is a fiduciary with respect to the Plan, and (iii) is
granted the power to manage, acquire or dispose of any asset of the Plan
pursuant to Section hereof and the Trust Agreement.
2.23 "Leave of Absence" shall mean an absence with or without pay
from the active employment of a Participating Company by reason of an
approved absence granted by such Participating Company in accordance with
its leave and personnel regulations, whether by reason of military service
or for any other reason on the basis of a uniform policy applied by such
Participating Company without discrimination (including periods during
which an Employee is receiving benefits under any disability or sickness
plan of a Participating Company or an Affiliated Company). Such a Leave
of Absence will not constitute a Termination of Employment provided the
Employee returns to the active employment of the Participating Company at
or prior to the expiration of his leave or, if not specified therein,
within the period of time which accords with such Participating Company's
policy with respect to permitted absences. If the Employee does not
return to the active employment of such Participating Company at or prior
to the expiration of his Leave of Absence, his employment will be
considered terminated as of the earlier of (i) the date on which his Leave
of Absence expired, or (ii) the date which is twelve (12) months after the
date on which his Leave of Absence began. Notwithstanding the foregoing
provisions of this Section, an Employee's absence from the active service
of a Participating Company because of military service will be considered
a Leave of Absence granted by a Participating Company and will not
terminate the employment of such Employee if he returns to the active
employment of the Participating Company within the period of time during
which he has reemployment rights under any applicable federal law or
within sixty (60) days from and after discharge or separation from such
military service if no federal law is applicable. However, no provision
of this Section or of the remainder of the Plan shall require reemployment
of any Employee whose active service with the Participating Company was
terminated by reason of military service.
2.24 "One-Year Period of Severance" shall mean a twelve (12)
consecutive month Period of Severance. Notwithstanding the foregoing
provisions hereof, or any other provision of this Plan to the contrary, in
the case of an Employee who is absent from work for any period (i) by
reason of (a) the Employee's pregnancy, (b) the birth of the Employee's
child, (c) the placement of a child with the Employee in connection with
the adoption of such child by the Employee, or (ii) for the purpose of
caring for such child for a period beginning immediately following such
birth or placement, the twelve (12) consecutive month period beginning on
the first anniversary of the first date of such absence shall not
constitute a One-Year Period of Severance and shall not constitute a
Period of Service.
2.25 "Participant" shall mean an Eligible Employee who becomes a
Participant in the Plan as provided in Section .
2.26 "Participating Company" shall mean the Sponsoring Company or any
Affiliated Company which adopts the Plan pursuant to Section .
2.27 "Period of Service" shall mean the period of time commencing on
an Employee's Employment Commencement Date or Reemployment Commencement
Date, as the case may be, and ending on such Employee's Severance from
Service Date. A Period of Service shall also include a Period of
Severance of less than twelve (12) consecutive months. Notwithstanding
the preceding sentence:
2.27.1 If an Employee who is on Leave of Absence or who is
temporarily laid off, retires or suffers a Termination of Employment
during the first twelve (12) months of such Leave of Absence or
temporary layoff, as the case may be, such Employee's Period of
Service shall not include any Period of Severance beginning on the
date such Employee retired or suffered a Termination of Employment and
ending on such Employee's Reemployment Commencement Date, if any, if
such Reemployment Commencement Date, if any, does not occur within the
twelve (12) month period commencing on the date such Leave of Absence
or temporary layoff began.
2.27.2 If an Employee works simultaneously for more than one
Participating Company and/or Affiliated Company, the total Period of
Service for such Employee shall not be increased by reason of such
simultaneous employment.
2.28 "Period of Severance" shall mean the period of time commencing
on an Employee's Severance from Service Date and ending on such Employee's
Reemployment Commencement Date, if any.
2.29 "Plan" shall mean the IDI 401(k) Savings Plan as set forth in
this document, and as hereafter amended from time to time.
2.30 "Plan Year" shall mean the twelve (12) consecutive month period
ending on December 31 of each year. The period from April 1, 1995 to
December 31, 1995 shall be a short plan year.
2.31 "Prior Plan Account" shall mean the separate account maintained
for each Participant reflecting the amounts in such Participant's combined
Accounts attributable to contributions made prior to October 1, 1995.
The Prior Plan Account shall include separate subaccounts for Before-
Tax Deposits, Company Matching Deposits and Cash Transfers From Another
Qualified Plan, and each such subaccount shall be subject to the same
provisions as its Plan Account counterpart (i.e., the Before-Tax Deposits
subaccount shall be subject to the provisions as the Before-Tax Deposit
Account), except as specifically provided otherwise in Sections and .
The Before-Tax Deposits subaccount shall reflect amounts attributable to
"elective contributions" (as defined in the Prior Plan) made prior to
October 1, 1995. The Company Matching Deposits subaccount shall reflect
amounts attributable to "matching contributions" and "non-elective
contributions" (as defined in the Prior Plan) made prior to October 1,
1995. The Rollover subaccount shall reflect amounts attributable to
amounts rolled over into the Prior Plan prior to October 1, 1995.
x2.32 "Reemployment Commencement Date" shall mean the date on which
an Employee first performs an Hour of Service with a Participating Company
or an Affiliated Company following such Employee's Severance from Service
Date.
2.33 "Retirement Date" of a Participant shall mean the Participant's
sixty-fifth (65th) birthday.
2.34 "Severance from Service Date" shall mean the earlier of:
2.34.1 The date on which an Employee separates from the active
employment of a Participating Company or an Affiliated Company on
account of retirement, death, Total and Permanent Disability or
Termination of Employment; or
2.34.2 In the case of an Employee on Leave of Absence who does
not return to the active employment of the Participating Company or an
Affiliated Company at or prior to the expiration of such Leave of
Absence, the earlier of (i) the expiration date of such Leave of
Absence, or (ii) the date which is twelve (12) months after the date
on which such Leave of Absence began, or, in the case of an Employee
who becomes absent (whether the absence is with or without pay) from
the active employment of a Participating Company or an Affiliated
Company by reason of a temporary layoff, the date which is twelve (12)
months after the date on which such Employee first becomes absent.
2.35 "Sponsoring Company" shall mean Integrated Distribution, Inc. or
its successor.
2.36 "Supplemental Before-Tax Deposit Account" shall mean the
separate account maintained for each Participant reflecting the
Supplemental Before-Tax Deposits made on behalf of such Participant, as
adjusted in accordance with the provisions of Section .
2.37 "Supplemental Before-Tax Deposits" shall mean the amount each
Active Participant has elected to have the Participating Companies
contribute on his behalf pursuant to the provisions of Section hereof
which is not subject to a Company Matching Deposit. Such amounts shall
qualify as elective contributions under Section 401(k) of the Code and the
regulations thereunder.
2.38 "Termination of Employment" shall mean the termination of active
employment with any Participating Company, whether voluntarily or
involuntarily, other than by reason of a Participant's retirement after
attaining his Retirement Date or after sustaining Total and Permanent
Disability, death or transfer to an Affiliated Company.
2.39 "Total and Permanent Disability" shall mean a termination of
employment due to a physical or mental condition of a Participant
resulting from bodily injury, disease, or mental disorder which
constitutes total disability under the federal Social Security Act, and
for which the Participant has actually been approved for Social Security
disability benefits.
2.40 "Trust" shall mean the legal entity resulting from the Trust
Agreement between the Sponsoring Company and the Trustee which receives
the Participating Companies' and Participants' contributions, and holds,
invests, and disburses funds to or for the benefit of Participants and
their Beneficiaries.
2.41 "Trust Fund" shall mean the total of contributions made by the
Participating Companies and Participants to the Trust pursuant to the
Plan, increased by profits, gains, income and recoveries received, and
decreased by losses, depreciation, benefits paid and expenses incurred in
the administration of the Trust. The Trust Fund includes all assets
acquired by investment and reinvestment which are held in the Trust by the
Trustee.
2.42 "Trustee" shall mean Fidelity Management Trust Company, trustee
of the Investment Trust, and any additional or successor Trustees. Except
as otherwise provided in the Trust Agreement and herein, the Trustee shall
be the "Named Fiduciary" referred to in Section 402(a) of ERISA with
respect to the control, management and disposition of the Trust Fund.
2.43 "Valuation Date" shall mean the close of each day that the New
York Stock Exchange is open for business.
2.44 "Vesting Year of Service" shall mean a Period of Service of
three hundred sixty-five (365) days, subject to the provisions of Sections
and hereof. Notwithstanding the preceding sentence, if a Participant has
a Reemployment Commencement Date, such Participant's Periods of Service
before and after such Reemployment Commencement Date which are required to
be taken into account under this Plan shall be determined on the basis of
the actual number of days in such aggregated Periods of Service.
Effective as of August 11, 1995, Arkansas Best Corporation acquired
WorldWay Corporation and certain of its subsidiaries ("WorldWay").
Notwithstanding any provision to the contrary, service with WorldWay prior
to August 11, 1995 shall not be recognized in determining Vesting Years of
Service. The Employment Commencement Date for the purposes of determining
Vesting Years of Service under the Plan of any person who became an
employee of an Affiliated Company as of August 11, 1995 as a result of
such acquisition and who subsequently becomes an Employee shall be
determined ignoring all service and hours of service accrued with WorldWay
prior to August 11, 1995.
2.45 Wherever appropriate, words used in the Plan in the singular may
mean the plural, the plural may mean the singular, and the masculine may
mean the feminine.
2.46 The expressions listed below shall have the meanings stated in
the Sections or Subsections hereof respectively indicated:
"Actual Contribution Percentage" ("ACP") Subsection
"Actual Deferral Percentage" ("ADP") Subsection
"Aggregated Family Group" Subsection
"Alternate Payee" Subsection
"Annual Additions" Section
"Borrower" Section
"Cash Transfers From Another Qualified Plan" Subsection
"Compensation" Section ;
Subsection
"Defined Benefit Plan" Subsection ;
Subsection
"Defined Benefit Plan Fraction" Subsection
"Defined Contribution Plan" Subsection ;
Subsection
"Defined Contribution Plan Fraction" Subsection
"Determination Date" Subsection
"Direct Rollover" Subsection
"Distributee" Subsection
"Eligible Employee" Subsection ;
Subsection
"Employer" Subsection
"Excess Aggregate Contributions" Subsection
"Excess Amounts" Subsection
"Excess Contributions" Subsection
"Excess Deferrals" Subsection
"Family Member" Subsection
"Highly Compensated Employee" Subsection
"Investment Funds" Subsection
"Key Employee" Subsection
"Key Employee Participant" Subsection
"Limitation Year" Subsection
"Limitation Year Compensation" Subsection ;
Subsection ;
Subsection
"Maximum Aggregate Amount" Subsection
"Named Fiduciary" Section ;
Section
"Non-Highly Compensated Employee" Subsection
"Non-Vested Amount" Subsection
"Permissive Aggregation Group" Subsection
"Permitted Purpose" Subsection
"Plan Administrator" Section
"Qualified Domestic Relations Order" Subsection
"Required Aggregation Group" Subsection
"Required Beginning Date" Section
"Retirement Plan" Subsection
"Rollover Account" Subsection
"Super Top Heavy Plan" Subsection
"Top Heavy Plan" Subsection
"Top Heavy Ratio" Subsection
"Total Compensation" Subsection
"Trust Agreement" Section
"Valuation Date" Subsection
"Valuation Period" Section
"Vested Amount" Subsection
SECTION 3
REQUIREMENTS FOR ELIGIBILITY
3.1 SERVICE. Each Eligible Employee who was eligible to participate
in the Plan as of September 30, 1995 shall continue to be eligible to
participate as of October 1, 1995. Each Eligible Employee shall be
eligible to become a Participant in the Plan as of any Entry Date. In the
event an Eligible Employee suffers a Termination of Employment prior to
the Entry Date upon which such Eligible Employee would have become a
Participant in the Plan, as the case may be, and such Eligible Employee is
reemployed by a Participating Company prior to a One-Year Period of
Severance, such Eligible Employee shall be eligible to become an Active
Participant in the Plan as of the date the Eligible Employee would have
attained a twelve (12) month Period of Service had such Termination of
Service not occurred and shall then be eligible to become an Active
Participant as of the Entry Date coincident with or next following his
date of rehire, provided such Eligible Employee is then still employed as
such.
3.2 SERVICE WITH A PREDECESSOR EMPLOYER. If the Plan had previously
been maintained by a predecessor of a Participating Company, whether a
corporation, partnership, sole proprietorship or other business entity,
any period of service with such predecessor shall be treated as a Period
of Service with a Participating Company. If the Plan had not been
maintained previously by a predecessor of a Participating Company, service
with such predecessor shall not be taken into account, except to the
extent required pursuant to regulations prescribed by the Secretary of the
Treasury or his delegate. Notwithstanding the foregoing, service by a
sole proprietor or partner shall not be counted as a Period of Service
with a Participating Company.
3.3 PERIODS OF SEVERANCE. For purposes of this Section , the
aggregate of all Periods of Service shall be taken into account. In the
event that a Participant has a Severance from Service Date and such
Participant is reemployed by a Participating Company, he shall resume
participation in the Plan effective as of his Reemployment Commencement
Date and shall be eligible to become an Active Participant in the Plan as
of the Entry Date coincident with or next following his Reemployment
Commencement Date.
3.4 CHANGE IN STATUS OF EMPLOYEE.
3.4.1 In the event an individual who is employed by a
Participating Company or an Affiliated Company but who is not defined
as an Eligible Employee becomes so defined as an Eligible Employee,
such individual shall be eligible to become a Participant as of the
date he becomes so defined, provided he has met the other requirements
for eligibility set forth in Section hereof and previously would have
become a Participant had he been defined as an Eligible Employee.
3.4.2 A Participant who ceases to be an Eligible Employee but
who does not suffer a Termination of Employment shall become a
suspended Participant. During the period of suspension, no amounts
shall be credited to the Participant's Accounts which are based on his
Compensation from and after the date of suspension. The suspended
Participant shall be entitled to benefits in accordance with the other
provisions of the Plan throughout the period during which he is
suspended.
3.4.3 In the event a Participant who ceased to be defined as an
Eligible Employee but who did not suffer a Termination of Employment,
subsequently becomes defined as an Employee again, such Participant
shall recommence participation without regard to the limitations
imposed by Subsection hereof, as of the date he became so redefined,
but shall not be eligible to become an Active Participant until the
Entry Date coinciding with or next following the date of becoming so
redefined as an Eligible Employee.
SECTION 4
ACTIVE PARTICIPATION IN THE PLAN
4.1 ACTIVE PARTICIPATION. Any Employee eligible to become a
Participant in the Plan in accordance with Section hereof, may become an
Active Participant in the Plan by electing no later than the date
determined by the Administrative Committee, pursuant to a uniform and
nondiscriminatory procedure established by the Administrative Committee,
to have made on his behalf Before-Tax Deposits in accordance with the
provisions of Section . Any Participant in the Plan who does not elect to
have made on his behalf Before-Tax Deposits at the time he becomes a
Participant in the Plan shall be and remain an Inactive Participant unless
and until he elects to have made on his behalf Before-Tax Deposits as
provided in Section .
4.2 ROLLOVER ACCOUNT.
4.2.1 With the consent of the Administrative Committee, Cash
Transfers From Another Qualified Plan may be received by the Trustee
on behalf of any Employee or Participant. Such amounts shall be
credited to a separate Account herein referred to as a "Rollover
Account." However, the transfer of such an amount to the Trustee will
not cause such transferring Employee to be eligible to participate in
the Plan prior to the time specified in Section and Section . Prior
to the time such Employee becomes eligible to participate in the Plan,
the Employee shall be treated as a Participant solely with respect to
the amount in his or her Rollover Account.
4.2.2 Cash credited to a Rollover Account (i) shall be held by
the Trustee pursuant to the provisions of this Plan, (ii) shall be
fully vested at all times and shall not be subject to forfeiture for
any reason, and (iii) shall be invested at the direction of the
Employee in accordance with the provisions of Section , and (iv) shall
be distributed to the Employee, Participant or Beneficiary at such
time and in the same manner as provided in Section hereof for the
distribution of a Participant's Accounts under the Plan; and may be
withdrawn in accordance with Section .
4.2.3 For purposes of this Section, the term "Cash Transfers
From Another Qualified Plan" means amounts which are properly
characterized as a qualifying rollover distribution received by a
person who is now an Employee, from another qualified plan, which
amounts are eligible for tax-free rollover treatment and which are
transferred in cash by the Employee to the Trustee of this Plan within
sixty (60) days following receipt thereof or are transferred in cash
directly from such qualified plan to this Plan; amounts transferred in
cash to this Plan from an individual retirement account, provided that
the individual retirement account contains only assets previously
distributed from a qualified plan, which amounts were eligible for
tax-free rollover treatment, and which amounts were deposited in such
individual retirement account within sixty (60) days of receipt
thereof, and amounts distributed to a person who is now an Employee
from an individual retirement account meeting the requirements of this
Subsection , and transferred in cash by the Employee to this Plan
within sixty (60) days of receipt thereof, from such individual
retirement account. Prior to accepting any cash transfers to which
this Section applies, the Administrative Committee may require the
Employee to establish that the amounts to be transferred in cash to
this Plan meet the requirements of this Section and may also require
that the Employee provide an opinion of counsel satisfactory to the
Administrative Committee that the amounts to be transferred meet the
requirements of this Section and will not jeopardize the tax exempt
status of this Plan or the Trust Fund for any reason (including, but
not limited to, the failure of the amount to be excluded from the
definition of annual addition in Section 415(c)(2) of the Code;
thereby causing the annual addition to the Account to exceed the
permissible limits of Section 415 of the Code, or to create adverse
tax consequences to a Participating Company.
SECTION 5
ADMINISTRATION OF THE PLAN
5.1 RESPONSIBILITY FOR ADMINISTRATION OF THE PLAN. The
Administrative Committee shall be responsible for the management,
operation and administration of the Plan.
5.2 APPOINTMENT OF ADMINISTRATIVE COMMITTEE. The Board of Directors
of the Sponsoring Company shall appoint an Administrative Committee
consisting of at least three (3) persons each of whom shall be employees
of a Participating or Affiliated Company. An appropriate of the
Sponsoring Company shall certify to the Trustee the names of the members
of the Administrative Committee. A member of the Administrative Committee
shall automatically cease to be a member upon termination of employment
with the Participating Company or Affiliated Company. Any member of the
Administrative Committee may resign upon ten (10) days' prior written
notice to an appropriate officer of the Sponsoring Company. The Board of
Directors of the Sponsoring Company shall be authorized to remove any
member of the Administrative Committee at any time and in its sole
discretion to appoint a successor whenever a vacancy on the Administrative
Committee occurs.
5.3 RESPONSIBILITY FOR ADMINISTRATION OF THE TRUST FUND. Except as
otherwise provided herein, the Trustee shall be responsible for the
management and investment of the Trust Fund in accordance with the
provisions of the Trust Agreement.
5.4 DELEGATION OF POWERS. The Administrative Committee may appoint
such assistants or representatives as it deems necessary for the effective
exercise of its duties in administering the Plan and Trust. The
Administrative Committee may delegate to such assistants and
representatives any powers and duties, both ministerial and discretionary,
as it deems expedient or appropriate.
5.5 RECORDS. All acts and determinations with respect to the
administration of the Plan made by the Administrative Committee and any
assistants or representatives appointed by it shall be duly recorded by
the Administrative Committee or by the assistant or representative
appointed by it to keep such records. All records, together with such
other documents as may be necessary for the administration of the Plan,
shall be preserved in the custody of the Administrative Committee or the
assistants or representatives appointed by it.
5.6 GENERAL ADMINISTRATIVE POWERS. The Administrative Committee is
authorized to take such actions as may be necessary to carry out the
provisions and purposes of the Plan and shall have the authority to
control and manage the operation and administration of the Plan in
accordance with its terms. In order to effectuate the purposes of the
Plan, the Administrative Committee shall have the discretionary power to
construe and interpret the Plan, to supply any omissions therein, to
reconcile and correct any errors or inconsistencies, to decide any
questions in the administration and application of the Plan, and to make
equitable adjustments for any mistakes or errors made in the
administration of the Plan. All such actions or determinations made by
the Administrative Committee, and the application of rules and regulations
to a particular case or issue by the Administrative Committee, in good
faith, shall not be subject to review by anyone, but shall be final,
binding and conclusive on all persons ever interested hereunder. In
construing the Plan and in exercising its power under provisions requiring
Administrative Committee approval, the Administrative Committee shall
attempt to ascertain the purpose of the provisions in question and when
such purpose is known or reasonably ascertainable, such purpose shall be
given effect to the extent feasible. Likewise, the Administrative
Committee is authorized to determine all questions with respect to the
individual rights of all Participants and their Beneficiaries and
Alternate Payees under this Plan, including, but not limited to, all
issues with respect to eligibility, Compensation, service, valuation of
Accounts, allocation of contributions and Trust Fund earnings, retirement,
Total and Permanent Disability, or Termination of Employment, eligibility
for loans and hardship withdrawals, and shall direct the Trustee
concerning the allocation, payment and distribution of all funds held in
trust for purposes of the Plan. The Administrative Committee shall
establish investment objectives and monitor, or cause to be monitored, the
investment performance of the Trustee or any Investment Manager which may
be appointed with respect to any assets of the Plan, and shall make such
reports and give such recommendations to the Board as it requests with
respect thereto.
5.7 APPOINTMENT OF PROFESSIONAL ASSISTANTS AND INVESTMENT MANAGER.
The Administrative Committee may engage accountants, attorneys, physicians
and such other personnel as it deems necessary or advisable, including in
its sole discretion, one or more Investment Managers to manage (including
the power to acquire or dispose of) all or any of the assets of the Trust.
The functions of any such persons engaged by the Administrative Committee
shall be limited to the specific services and duties for which they are
engaged, and such persons shall have no other duties, obligations or
responsibilities under the Plan or Trust. Such persons shall exercise no
discretionary authority or discretionary control respecting the management
of the Plan, and, unless engaged specifically as Investment Manager, shall
exercise no authority or control respecting management or disposition of
the assets of the Trust. The fees and costs of such services are an
administrative expense of the Plan to be paid out of the Trust Fund,
except to the extent that such fees and costs are paid by any of the
Participating Companies.
5.8 ACTIONS OF THE ADMINISTRATIVE COMMITTEE.
5.8.1 A majority of the members of the Administrative Committee
shall constitute a quorum for the transaction of business, and shall
have full power to act hereunder. Action by the Administrative
Committee shall be official if approved by a vote of a majority of the
members present at any official meeting. The Administrative Committee
may, without a meeting, authorize or approve any action by written
instrument signed by a majority of all of the members. Any written
memorandum signed by the Chairman, or any other member of the
Administrative Committee, or by any other person duly authorized by
the Administrative Committee to act, in respect of the subject matter
of the memorandum, shall have the same force and effect as a formal
resolution adopted in open meeting. The Administrative Committee
shall give to the Trustee any order, direction, consent, certificate
or advice required or permitted under the terms of the Trust
Agreement, and the Trustee shall be entitled to rely on, as evidencing
the action of the Administrative Committee, any instrument delivered
to the Trustee when: (i) if a resolution, it is certified by the
Chairman and Secretary, or (ii) if a memorandum, it is signed by a
majority of all of the members of the Administrative Committee, or by
a person who shall have been authorized to act for the Administrative
Committee in respect of the subject matter thereof.
5.8.2 A member of the Administrative Committee may not vote or
decide upon any matter relating solely to him or vote in any case in
which his individual right or claim to any benefit under the Plan is
specifically involved. If, in any case in which an Administrative
Committee member is so disqualified to act, the remaining members then
present cannot, by majority vote, act or decide, the Board will
appoint a temporary substitute member to exercise all of the powers of
the disqualified member concerning the matter in which he is
disqualified.
5.8.3 The Administrative Committee shall maintain minutes of its
meetings and written records of its actions, and as long as such
minutes and written records are maintained, members may participate
and hold a meeting of the Administrative Committee by means of
conference telephone or similar communications equipment which permits
all persons participating in the meeting to hear each other.
Participation in such a meeting constitutes presence in person at such
meeting.
5.9 DIRECTIVES OF THE ADMINISTRATIVE COMMITTEE. Directives of the
Administrative Committee to the Trustee shall be delivered in writing,
signed by an appropriate member of the Administrative Committee.
5.10 DISCRETIONARY ACTS. Any discretionary actions of the
Administrative Committee or any Participating Company with respect to the
administration of the Plan shall be made in a manner which does not
discriminate in favor of Highly Compensated Employees. In the event the
Administrative Committee exercises any discretionary authority under the
Plan with respect to a Participant who is a member of the Administrative
Committee, such discretionary authority shall be exercised solely and
exclusively by those members of the Administrative Committee other than
such Participant, or, if such Participant is the sole member of the
Administrative Committee, such discretionary authority shall be exercised
solely and exclusively by the Board of Directors of the Sponsoring
Company.
5.11 RESPONSIBILITY OF FIDUCIARIES. The members of the
Administrative Committee and their assistants and representatives (other
than any Investment Manager) shall be free from all liability for their
acts and conduct in the administration of the Plan and Trust except for
acts of willful misconduct or gross negligence; provided, however, that
the foregoing shall not relieve any of them from any responsibility or
liability for any responsibility, obligation or duty that they may have
pursuant to ERISA.
5.12 INDEMNITY BY PARTICIPATING COMPANIES. In the event and to the
extent not insured against under any contract of insurance with an
insurance company, the Participating Companies shall indemnify and hold
harmless each "Indemnified Person," as defined below, against any and all
claims, demands, suits, proceedings, losses, damages, interest, penalties,
expenses (specifically including, but not limited to counsel fees to the
extent approved by the Board of Directors of the Sponsoring Company or
otherwise provided by law, court costs and other reasonable expenses of
litigation), and liability of every kind, including amounts paid in
settlement, with the approval of the Board of Directors of the Sponsoring
Company, arising from any action or cause of action related to the
Indemnified Person's act or acts or failure to act. Such indemnity shall
apply regardless of whether such claims, demands, suits, proceedings,
losses, damages, interest, penalties, expenses, and liability arise in
whole or in part from (i) the negligence or other fault of the Indemnified
Person, except when the same is judicially determined to be due to gross
negligence, fraud, recklessness, a willful or intentional misconduct of
such Indemnified Person or (ii) from the imposition on such Indemnified
Person of any penalties imposed by the Secretary of Labor, pursuant to
Section 502(l) of ERISA, relating to any breaches of fiduciary
responsibility under Part 4 of Title I of ERISA. "Indemnified Person"
shall mean each member of the Board of Directors of the Sponsoring
Company, and the Administrative Committee and each other Employee who is
allocated fiduciary responsibility hereunder.
5.13 PAYMENT OF FEES AND EXPENSES. The Trustee, the members of the
Administrative Committee and their assistants and representatives shall be
entitled to payment or reimbursement for all reasonable costs, charges and
expenses incurred in the administration of the Plan and Trust, including,
but not limited to, reasonable fees for accounting, legal and other
services rendered, to the extent incurred by the Trustee, the members of
the Administrative Committee or their assistants and representatives in
the course of performance of their duties under the Plan and the Trust.
All costs, charges and expenses incurred in the administration of the Plan
and the Trust shall be paid from the Trust Fund except to the extent paid
by the Participating Companies or any Affiliated Company. Notwithstanding
any other provision of the Plan or Trust, no person who is a "disqualified
person," within the meaning of Section 4975(e)(2) of the Code and who
receives full-time pay from any Participating Company shall receive
compensation from the Trust Fund, except for payment or reimbursement of
expenses properly and actually incurred.
5.14 PLAN ADMINISTRATOR. The Administrative Committee shall be the
"Plan Administrator" (as defined in Section 3(16)(A) of ERISA) of the
Plan, and shall be responsible for the performance of all reporting and
disclosure obligations under ERISA and all other obligations required or
permitted to be performed by the Plan Administrator under ERISA and not
otherwise delegated to other parties under the terms of the Plan or the
Trust Agreement. The Plan Administrator shall be the designated agent for
service of legal process.
5.15 ALLOCATION AND DELEGATION OF ADMINISTRATIVE COMMITTEE
RESPONSIBILITIES. The Administrative Committee may upon approval of a
majority of the members of the Administrative Committee, (i) allocate
among any of the members of the Administrative Committee any of the
responsibilities of the Administrative Committee under the Plan, or (ii)
designate any person, firm or corporation that is not a member of the
Administrative Committee to carry out any of the responsibilities of the
Administrative Committee under the Plan. Any such allocation or
designation shall be made pursuant to a written instrument executed by a
majority of the members of the Administrative Committee.
SECTION 6
DEPOSITS
6.1 COMPANY MATCHING DEPOSITS.
6.1.1 Each Participating Company shall make a Company Matching
Deposit to the Trust for each calendar month in an amount equal to a
specified percentage of the Basic Before-Tax Deposits, if any, made by
such Participating Company during such calendar month on behalf of
each Active Participant employed by such Participating Company during
such calendar month. Any change in the specified percentage of the
Basic Before-Tax Deposits to be matched for each Plan Year shall, no
later than December 1 of the preceding Plan Year, be determined by the
Board of Directors of the Sponsoring Company and be communicated to
all Participants and all Employees who will be eligible to become
Participants in the Plan during such succeeding Plan Year. In
addition, such specified percentage may be increased by the Board of
Directors of the Sponsoring Company at any time during the Plan Year.
Until changed by the Board of Directors of the Sponsoring Company, the
Company Matching Contribution shall be as set forth in the table
below.
<TABLE>
<CAPTION>
VESTING YEARS OF SERVICE * RATE OF MATCHING CONTRIBUTION
<S> <C>
1 500%
2 400%
3 300%
4 200%
5 and beyond 100%
</TABLE>
* NOTE: VESTING YEARS OF SERVICE DISREGARDED UNDER SECTION
SHALL NOT BE TAKEN INTO ACCOUNT FOR THIS PURPOSE EITHER.
6.1.2 In addition to its Company Matching Deposits under
Subsection above, each Participating Company shall make such
additional Company Matching Deposits for each Plan Year as the Board
of Directors of the Sponsoring Company, in its discretion, shall
determine. Such additional deposits shall equal a specified
percentage (which may be zero) of the Basic Before-Tax Deposits for
the Plan Year of each Active Participant employed by such
Participating Company as of the last day of such Plan Year. The Board
shall determine the amount of any such additional Company Matching
Deposits, and direct the Participating Companies to deposit such
amounts, no later than the latest date prescribed by Section below.
6.1.3 Notwithstanding the foregoing, in no event shall any
Company Matching Deposits, when added to any Before-Tax Deposits,
exceed the maximum permissible contribution under Section 404(a) of
the Code. All contributions of the Participating Companies hereunder
are conditioned on their deductibility under Section 404(a) of the
Code. Company Matching Deposits shall be made in the form of cash.
6.2 BASIC AND SUPPLEMENTAL BEFORE-TAX DEPOSITS.
6.2.1 Each Participant may have contributed on his behalf to the
Trust Fund each month by salary reduction an amount (the "Basic
Before-Tax Deposit") which shall be equal to one percent (1%), two
percent (2%), three percent (3%), or four percent (4%) of such
Participant's Compensation for such month, as such Participant shall
elect on the written authorization form provided for herein. Any
Active Participant who elects to have made on his behalf Basic Before-
Tax Deposits of four percent (4%) of his Compensation for each month
may also elect to have contributed on his behalf to the Trust Fund
each month by salary reduction an additional amount ("Supplemental
Before- Tax Deposits") equal to from one percent (1%) to eleven
percent (11%) of his compensation; provided, however, such percentage
must be a whole percent. Any designated Before-Tax Deposits (whether
Basic or Supplemental Deposits or both) shall qualify as elective
contributions under Section 401(k) of the Code and the regulations
thereunder.
6.2.2 The percentage rate of Basic and Supplemental Before-Tax
Deposits, if any, which each Active Participant elects and any changes
thereto shall be made on a written form provided by and filed with the
Administrative Committee. The Administrative Committee shall
establish and communicate to Employees uniform and nondiscriminatory
procedures for the election of percentage rates of Basic and
Supplemental Before-Tax Deposits, including procedures regarding the
effective date of such election, and may change said procedures at
such times and in such manner as the Administrative Committee may
determine to be necessary or desirable. Any such change in procedures
shall be communicated to Employees.
6.2.3 An Active Participant's Basic and Supplemental Before-Tax
Deposits shall be credited to his appropriate Account under the Plan.
Any amounts of Basic or Supplemental Before-Tax Deposits properly
credited to a Participant's Accounts shall, for all purposes and in
all respects, be fully vested and nonforfeitable.
6.3 DATE OF PAYMENT OF DEPOSITS. A Participating Company shall make
its Company Matching Deposits for a particular period on or before the
last date, including any extensions thereof, for filing its federal income
tax return for its taxable year ending with or after the last day of the
Plan Year in which such period falls or at such earlier time and in such
amount as directed by the Administrative Committee for the purpose of
paying a Participant taking a final distribution of the Company Match
allocated to such Participant. A Participating Company shall make all
Basic and Supplemental Before-Tax Deposits as provided for in Section
hereof to the Trust Fund as soon as administratively practical following
the deduction of such amounts from Active Participants' pay.
6.4 SPECIAL LIMITATIONS ON BEFORE-TAX DEPOSITS. The limitations
described in this Section shall be determined in accordance with Code
Sections 401(k) and 402(g) and regulations thereunder, which are
incorporated by reference to the extent not expressly stated below.
6.4.1 Notwithstanding any other provision of this Plan, in no
event shall a Participating Company make Before-Tax Deposits in any
Plan Year if such contribution would cause the "Actual Deferral
Percentage" (or "ADP") of Highly Compensated Employees to exceed the
greater of the limitations indicated below:
6.4.1.1 One hundred twenty-five percent (125%) of the ADP
for all Non-Highly Compensated Employees; or
6.4.1.2 The lesser of (i) the sum of the ADP for all Non-
Highly Compensated Employees plus two percent (2%), or (ii) two
hundred percent (200%) of the ADP for all Non-Highly Compensated
Employees.
Multiple use of the alternative method described in this
paragraph and in Code Section 401(m)(9)(A) will be prevented
through the pro rata reduction of both the actual deferral
percentage and the actual contribution percentage of any Highly
Compensated Employee eligible to make Before-Tax Deposits
pursuant to Section and who is eligible to make employee
contributions or to receive Company Matching Deposits under this
Plan. Any reduction under this paragraph will be made in
accordance with Sections and hereof and Code Section 401(m) and
Treasury Regulation Sections 1.401(m)-1(b) and 1.401(m)-2, the
provisions of which are incorporated herein by reference.
6.4.2 The Administrative Committee may, to the extent necessary
to conform the Before-Tax Deposits to the above limitations, reduce
prospectively, the percentage rates or dollar amounts of Before-Tax
Deposits to be made on behalf of Highly Compensated Employees. Such
prospective reductions may thereafter be adjusted by the
Administrative Committee, upon due notice to the affected
Participants, at any time thereafter to increase the elected
percentage rates for those Highly Compensated Employees whose rates or
amounts were previously reduced in accordance with this Subsection if
the Administrative Committee shall determine that such increase will
not cause the limits set forth in Subsection to be exceeded for the
Plan Year. Any decrease of a Participant's Before-Tax Deposits under
this Subsection shall be in addition to and not otherwise affect such
Participant's rights to change or suspend contributions.
6.4.3 In the event that following the end of a Plan Year, it is
determined by the Administrative Committee that the Before-Tax
Deposits for Highly Compensated Employees exceed the limitations of
Subsection , then the amount in excess of such limitation ("Excess
Contributions") (and the income thereon) shall be distributed to the
Highly Compensated Employees, notwithstanding any Plan provision to
the contrary, within the twelve (12) month period following the end of
the Plan Year in which such Excess Contributions occurred. In
distributing Excess Contributions, the following rules shall apply.
The Excess Contributions shall first be applied to reduce the
percentage rate elected by all those Highly Compensated Employees who
have elected the highest percentage rate of Before-Tax Deposits, shall
then be applied to reduce the percentage rate elected by all those
Highly Compensated Employees (including those Employees whose
percentage rate or dollar amount was previously reduced) whose elected
percentage rate is at the next highest percentage rate of Before-Tax
Deposits and shall thereafter continue to be applied to the extent
necessary in like manner in descending order on the basis of elected
percentage rates until the reductions enable the Before-Tax Deposits
to conform to the limitations of Subsection . The amount of Excess
Contributions to be distributed to each affected Highly Compensated
Employee is equal to the Before-Tax Deposits on behalf of such
Employee (prior to reduction of the Excess Contributions) less the
product of such Employee's ADP (after reduction of the Excess
Contributions) times such Participant's Total Compensation, rounded to
the nearest one cent ($.01).
The amount of Excess Contributions that may be distributed under
this Subsection with respect to a Highly Compensated Employee for a
Plan Year shall be reduced by any Excess Deferrals (as defined in
Section ) attributable to such Plan Year previously distributed to the
Employee. In the event a distribution of Before-Tax Deposits
constitutes a distribution of Excess Contributions and a distribution
of Excess Deferrals pursuant to Section , the amounts distributed
shall be treated as a simultaneous distribution of both Excess
Contributions and Excess Deferrals.
6.4.4 In determining the amount of income or loss allocable to
Excess Contributions which are being distributed, the following rules
shall apply:
6.4.4.1 The income or loss allocable to Excess
Contributions for the Plan Year in which the contributions are
made is the income for the Plan Year allocable to Before-Tax
Deposits and amounts treated as Before-Tax Deposits with respect
to the Highly Compensated Employee, multiplied by a fraction, the
numerator of which is the amount of Excess Contributions made on
behalf of the Highly Compensated Employee for the Plan Year and
the denominator of which is the combined balance of the aggregate
of the Participant's Basic Before-Tax Deposit Account and
Supplemental Before-Tax Deposit Account as of the end of the Plan
Year.
6.4.4.2 No income or loss shall be allocable to the Excess
Contributions for the period between the end of the Plan Year and
the date of the distribution.
For purposes of this Subsection , the income of the Plan
shall mean all earnings, gains and losses, computed in accordance
with the provisions of Section .
6.4.5 Notwithstanding anything to the contrary contained herein,
in the case of a Highly Compensated Employee who is part of an
Aggregated Family Group, as defined in Subsection , the following
rules shall apply:
6.4.5.1 The ADP for the Aggregated Family Group (which
shall be treated as a single Highly Compensated Employee) shall
be the ADP determined by aggregating the Before-Tax Deposits and
Total Compensation of all Family Members, as defined in
Subsection , who are Eligible Employees. Otherwise, the Before-
Tax Deposits and Total Compensation of all Family Members are
disregarded for purposes of determining the ADP for the Highly-
Compensated Employees, as a group, and the Non-Highly Compensated
Employees as a group.
6.4.5.2 If the ADP of the Aggregated Family Group as
determined under Subsection above exceeds the limitations of
Subsection , the ADP shall be reduced as provided in Subsection
in order to comply with the limitations of Subsection , and
Excess Contributions shall be allocated among all of the Family
Members in proportion to each such Family Member's Before-Tax
Deposits.
6.4.6 In addition to or in lieu of the above procedures to
conform Before-Tax Deposits to the limitations of Subsection , the
Sponsoring Company may, in its sole discretion, cause the
Participating Companies to contribute on behalf of any Non-highly
Compensated Employee additional contributions (which shall be treated
as Supplemental Before-Tax Deposits) to the extent necessary to insure
that the limitations of Subsection are met. Such additional
contributions shall be immediately fully vested and subject to the
distribution restrictions of Section hereof, applicable to Before-Tax
Deposits. Such additional contributions shall be treated as Before-
Tax Deposits only if the requirements of Treasury Regulation Section
1.401(k)-l(b)(5) (or any successor thereto) are met.
6.4.7 Notwithstanding anything herein to the contrary, in no
event shall the Participating Employer make Before-Tax Deposits in any
calendar year on behalf of any Participant if such contribution would
cause the Before-Tax Deposits for such Participant for the calendar
year to exceed Seven Thousand Dollars ($7,000), or such amount as
adjusted by the Secretary of the Treasury or his delegate at the same
time and in the same manner as under Code Section 415(d). Should any
Before-Tax Deposits made to the Plan by the Participating Employer on
behalf of a Participant exceed Seven Thousand Dollars ($7,000), as
adjusted by the Secretary of the Treasury or his delegate at the same
time and in the same manner as under Code Section 415(d) ("Excess
Deferrals"), the Administrative Committee may distribute such Excess
Deferrals (and income thereon) to such Participant, notwithstanding
any Plan provision to the contrary, by the April 15 next following the
calendar year in which such Excess Deferral is made. The
Administrative Committee is authorized to establish such rules as may
be necessary to provide for distribution of Excess Deferrals (and
income thereon) caused by an individual's participation in more than
one cash or deferred arrangement where the total deferrals exceed the
amount referred to above and the individual allocates part of the
aggregate Excess Deferral to this Plan as permitted by law.
In determining the amount of income or loss allocable to Excess
Deferrals, the following rules shall apply:
6.4.7.1 The income or loss allocable to Excess Deferrals
for the calendar year in which the deferrals are made is the
income or loss for the Plan Year allocable to Before-Tax Deposits
for the Participant multiplied by a fraction, the numerator of
which is the amount of Excess Deferrals made on behalf of the
Participant for the Plan Year and the denominator of which is the
aggregate balance of the Participant's Basic Before-Tax Deposit
Account and Supplemental Before-Tax Deposit Account as of the end
of the Plan Year.
6.4.7.2 No income or loss shall be allocable to the Excess
Deferrals for the period between the end of the Plan Year and the
date of the distribution.
For purposes of this Subsection , the income or loss of the
Plan shall mean all earnings, gains and losses computed in
accordance with the provisions of Section .
The amount of Excess Deferrals that may be distributed under
this Subsection with respect to a Highly Compensated Employee
for a calendar year shall be reduced by any Excess Contributions
previously distributed to the Employee during such Plan Year. In
the event a distribution of Before-Tax Deposits constitutes a
distribution of Excess Contributions pursuant to Subsection and
a distribution of Excess Deferrals pursuant to this Subsection ,
the amounts distributed shall be treated as a simultaneous
distribution of both Excess Contributions and Excess Deferrals.
6.4.8 For purposes of this Section and Section , the following
terms shall have the following meanings:
6.4.8.1 "Actual Deferral Percentage" (or "ADP") shall mean
for the Highly Compensated Employees, as a group, and for the
Non-Highly Compensated Employees, as a group, the average of the
ratios (calculated separately for each Employee in such group) of
the Before-Tax Deposits, if any, made on behalf of each such
Employee for each Plan Year, to the Employee's Total
Compensation, as defined in Subsection , for such Plan Year. ADP
for each group, and the ratio of Before-Tax Contributions to
Total Compensation for each individual, shall be calculated to
the nearest 100th of one percent.
In calculating ADP, Before-Tax Deposits shall be taken into
account for a Plan Year only, if such Before-Tax Deposits: (i)
relate to Total Compensation that would have been received by the
Employee during such Plan Year (but for the salary reduction
election) or is attributable to services performed by the
Employee during such Plan Year and would have been received by
the Employee within two and one-half (2- 1/2 ) months after the
close of such Plan Year (but for the salary reduction agreement);
and (ii) are allocated to the Employee during such Plan Year.
Before-Tax Deposits are treated as allocated as of a particular
date during a Plan Year if allocation of such contribution is not
contingent on participation in the Plan or the performance of
services after such date and such contribution is paid to the
Trust not later than twelve (12) months after the close of such
Plan Year.
In calculating the ADP of a Highly Compensated Employee who
participates in more than one plan maintained by an Affiliated
Company, all elective deferrals (as defined in Section 401(m)(4)
of the Code) of such Employee shall be aggregated for purposes of
determining such percentage.
In calculating ADP, all elective deferrals (as defined in
Section 401(m)(4) of the Code) to any plan required to be
aggregated with the Plan for purposes of Code Section 401(a)(4)
or 410(b) shall be treated as if made under the Plan. If the
Plan is permissively aggregated with another plan in order to
comply with the limitations of Subsection , such aggregated plans
must also meet the requirements of Code Sections 401(a)(4) and
410(b) as a single plan.
6.4.8.2 "Highly Compensated Employee" shall mean any
Eligible Employee who is a highly compensated employee as defined
in Code Section 414(q) and the regulations thereunder.
Generally, any Eligible Employee is considered a Highly
Compensated Employee if such Eligible Employee:
6.4.8.2.1 was at any time during the current Plan Year
or the prior Plan Year, a "five percent owner" as defined in
Section 416(i)(1)(B)(i) of the Code, with respect to a
Participating Company;
6.4.8.2.2 received Limitation Year Compensation from a
Participating Company in excess of Seventy-Five Thousand
Dollars ($75,000) as adjusted by the Secretary of Treasury
pursuant to Section 414(q)(1) of the Code during the prior
Plan Year;
6.4.8.2.3 received Limitation Year Compensation from a
Participating Company in excess of Fifty Thousand Dollars
($50,000) as adjusted by the Secretary of Treasury pursuant
to Section 414(q)(1) of the Code, and was in the top-paid
group of Employees during the prior Plan Year. An Employee
is in the top-paid group of Employees for any Plan Year if
such Employee is in the group consisting of the top twenty
percent (20%) of the Employees when ranked on the basis of
Limitation Year Compensation paid during the Plan Year. For
purposes of determining the number of Employees in the top-
paid group, Employees who have not completed six (6) months
of service, normally work less than seventeen and one-half
(17- 1/2 ) hours per week, normally work during six (6) or
less months per year, have not attained the age of twenty-
one (21), are nonresident aliens with no earned income from
sources within the United States (within the meaning of
Section 861(a)(3) of the Code), or are included in a unit of
employees covered by a collective bargaining agreement
(except to the extent provided in regulations), shall not be
included;
6.4.8.2.4 is an officer of a Participating Company who
received Limitation Year Compensation for a Plan Year in
excess of fifty percent (50%) of the amount in effect under
Code Section 415(b)(1)(A) for such Plan Year (if no officer
of a Participating Company has Limitation Year Compensation
in excess of such amount, the officer having the highest
Limitation Year Compensation for such Plan Year shall be
treated as an officer). For purposes of this Subsection,
not more than fifty (50) Employees (or, if less, the greater
of three (3) Employees or ten percent (10%) of Employees)
shall be treated as officers.
6.4.8.2.5 An Eligible Employee who is not described in
, or above for the immediately preceding Plan Year shall
only be considered a Highly Compensated Employee if he is
among the 100 highest paid Employees during the current Plan
Year.
For purposes of this Section and Section : (i) the
determination of "Limitation Year Compensation" shall include
amounts deferred pursuant to Code Sections 125, 401(k) and
403(b), (ii) Limitation Year Compensation shall include
compensation paid by any employer required to be aggregated with
a Participating Company under Section 414(b), (c), (m) or (o) of
the Code, and (iii) a Former Employee who is an Eligible Employee
shall be treated as a Highly Compensated Employee if such Former
Employee was a Highly Compensated Employee when he separated from
service with the Participating Company or was a Highly
Compensated Employee at any time after attaining age fifty-five
(55). "Former Employee" shall mean a person who has been an
Employee, but who ceased to be an Employee for any reason and
later returned to employment with the Participating Company.
6.4.8.3 "Non-Highly Compensated Employee" shall mean each
Eligible Employee who is not a Highly Compensated Employee.
6.4.8.4 "Eligible Employee" shall mean, each Eligible
Employee who has completed the service requirements of Section
and is eligible to become a Participant and each other Employee
who is an Active Participant.
6.4.8.5 "Total Compensation" shall mean compensation
received by an Eligible Employee for the Plan Year in question
from an Affiliated Company which is required to be reported as
wages for income tax purposes on the Eligible Employee's Form W-2
plus, if elected by the Administrative Committee in accordance
with Treasury Regulations, any amount that is not currently
includable in the Eligible Employee's gross income by reason of a
deferral pursuant to Sections 125 and 401(k) of the Code. In the
event an Employee begins, resumes or ceases to be an Eligible
Employee during a Plan Year, the amount of the Employee's Total
Compensation for only the portion of the Plan Year in which he
was an Eligible Employee shall be taken into account for purposes
of Sections and . Effective January 1, 1989, Total Compensation
shall be limited to Two Hundred Thousand Dollars ($200,000) or
such higher amount to which such amount shall be adjusted by the
Secretary of the Treasury or his delegate pursuant to Section
401(a)(17) of the Code. Effective January 1, 1994, Total
Compensation shall be limited to One Hundred Fifty Thousand
Dollars ($150,000) or such higher amount to which such amount
shall be adjusted by the Secretary of the Treasury or his
delegate pursuant to Section 401(a)(17) of the Code.
6.4.8.6 "Aggregated Family Group" shall mean a family
group required to be aggregated under Code Section 414(q)(6) and
regulations thereunder and shall include any member of the
family, as defined in Code Section 414(q)(6) and regulations
thereunder, of either (i) a five percent (5%) owner, or (ii) one
of the ten (10) Highly Compensated Employees paid the greatest
Limitation Year Compensation for the current Plan Year. Any
spouse, lineal ascendant, lineal descendent, spouse of a lineal
ascendant, or spouse of a lineal descendent of such a Highly
Compensated Employee (a "Family Member") shall be included in the
"Aggregated Family Group."
6.4.9 Notwithstanding anything to the contrary in the Plan, to
the extent a Participant's Before-Tax Deposits for a Plan Year are
reduced and refunded to him pursuant to Subsection or Subsection ,
such refunded amounts shall be disregarded in determining the amount
of Company Matching Deposits to which a Participant is entitled for
the Plan Year.
6.5 SPECIAL LIMITATION ON COMPANY MATCHING DEPOSITS. This Section
is effective July 1, 1988. The limitations described in this Section
shall be determined in accordance with the applicable sections of the Code
and regulations thereunder. Notwithstanding anything to the contrary in
this Section or in Section , the limitations of Section or shall be
reduced to the extent required by Treasury Regulation Section 1.401(m)-2
(or any successor thereto).
6.5.1 Notwithstanding any other provision of this Plan, the
"Actual Contribution Percentage" (or "ACP") of Company Matching
Deposits made to this Plan for Highly Compensated Employees during any
Plan Year shall not exceed the greater of the limitations indicated
below:
6.5.1.1 One hundred twenty-five percent (125%) of the ACP
for all Non-Highly Compensated Employees; or
6.5.1.2 The lesser of (i) the sum of the ACP for all Non-
Highly Compensated Employees plus two percent (2%), or (ii) two
hundred percent (200%) of the ACP for all Non-Highly Compensated
Employees. However, multiple use of the alternative method
described in this paragraph and in Code Section 401(m)(9)(A) will
be prevented through the pro rata reduction of both the actual
deferral percentage and the actual contribution percentage of any
Highly Compensated Employee eligible to make Before-Tax Deposits
pursuant to Section and who is eligible to make employee
contributions or to receive Company Matching Deposits under this
Plan. Any reduction under this paragraph will be made in
accordance with Sections and hereof and Code Section 401(m) and
Treasury Regulation Sections 1.401(m)-1(b) and 1.401(m)-2, the
provisions of which are incorporated herein by reference.
6.5.2 The Administrative Committee shall, to the extent
necessary to conform to the limitations of Subsection , reduce
prospectively, the percentage rates or dollar amounts of Company
Matching Deposits to be made on behalf of Highly Compensated
Employees. Such prospective reductions may thereafter be adjusted by
the Administrative Committee, upon due notice to the affected
Participants, at any time thereafter to increase the elected
percentage rates for those Highly Compensated Employees whose rates
were previously reduced in accordance with this subsection if the
Administrative Committee shall determine that such increase will not
cause the limits set forth in this subsection to be exceeded for the
Plan Year.
6.5.3 In the event that following the end of the Plan Year, it
is determined by the Administrative Committee that the Company
Matching Deposits for Highly Compensated Employees exceed the
limitations of Subsection , then the amount in excess of such
limitation ("Excess Aggregate Contributions") (and income thereon)
shall be distributed to the Highly Compensated Employees who are one
hundred percent (100%) vested in such amounts, notwithstanding any
Plan provision to the contrary, within the twelve months following the
end of the Plan Year in which such Excess Aggregate Contributions
occurred. In the case of any Highly Compensated Employee who is not
one hundred percent (100%) vested in his Company Matching Deposit
Account, such excess amount shall be treated as a forfeiture under
Section . The Excess Aggregate Contributions shall first be applied to
reduce the percentage rate elected by all those Highly Compensated
Employees who have elected the highest percentage rate of Company
Matching Deposits, shall then be applied to reduce the percentage rate
elected by all those Highly Compensated Employees (including those
Employees whose percentage rate was previously reduced) whose elected
percentage rate is at the next highest percentage rate of Company
Matching Deposits, and shall thereafter continue to be applied to the
extent necessary in like manner in descending order on the basis of
elected percentage rates until the reductions enable the Company
Matching Deposits to conform to the limitations of Subsection . The
amount of Excess Aggregate Contributions to be distributed to each
affected Highly Compensated Employee is equal to the Company Matching
Deposits on behalf of such Employee (prior to reduction of the Excess
Aggregate Contributions), less the product of such Employee's ACP
(after reduction of the Excess Aggregate Contributions) times such
Participant's Total Compensation, rounded to the nearest one cent
($.01).
6.5.4 In determining the amount of income or loss allocable to
Excess Aggregate Contributions which are being distributed, the
following rules shall apply:
6.5.4.1 The income or loss allocable to Excess Aggregate
Contributions for the Plan Year in which the contributions are
made is the income or loss for the Plan Year allocable to Company
Matching Deposits with respect to the Highly Compensated Employee
multiplied by a fraction, the numerator of which is the amount of
Excess Aggregate Contributions made on behalf of the Highly
Compensated Employee for the Plan Year and the denominator of
which is the balance of the Company Matching Deposits Account
attributable to Company Matching Deposits as of the end of the
Plan Year.
6.5.4.2 No income or loss shall be allocable to the Excess
Aggregate Contributions for the period between the end of the
Plan Year and the date of the distribution.
For purposes of this Subsection , the income or loss of the Plan shall
mean all earnings, gains and losses computed in accordance with the
provisions of Section .
6.5.5 Notwithstanding anything to the contrary contained herein,
in the case of a Highly Compensated Employee who is part of an
Aggregated Family Group, the following rules shall apply:
6.5.5.1 The ACP for the Aggregated Family Group (which
shall be treated as a Single Highly Compensated Employee), as
defined in Subsection , shall be the ACP determined by
aggregating the Company Matching Deposits and Total Compensation
of all Family Members, as defined in Subsection , who are
Eligible Employees. Otherwise, the Company Matching Deposits and
Total Compensation of all Family Members are disregarded for
purposes of determining the ACP for the Highly Compensated
Employees, as a group and the Non-Highly Compensated Employees,
as a group.
6.5.5.2 If the ACP of the Aggregated Family Group is
determined under Subsection above and the limitations of
Subsection are exceeded, the ACP shall be reduced as provided in
Subsection in order to comply with the limitations of Subsection
, and Excess Aggregate Contributions shall be allocated among all
of the Family Members in proportion to each such Family Member's
Company Matching Deposits.
6.5.6 In addition to or in lieu of the above procedures to
conform Company Matching Deposits to the limitations of Subsection ,
the Sponsoring Company may, in its sole discretion, cause the
Participating Companies to contribute on behalf of any Non-highly
Compensated Employee additional contributions (which shall be treated
as Supplemental Before-Tax Deposits) to the extent necessary to insure
that the limitations of Subsection are met. Such additional
contributions shall be immediately fully vested and subject to the
distribution restrictions of Section hereof, applicable to Before-Tax
Deposits. Such additional contributions included in the calculations
under Subsection only if the requirements of Treasury Regulation
Section 1.401(m)-l(b)(5) (or any successor thereto) are met. In
addition, the Administrative Committee may designate that all or part
of the Before-Tax Deposits shall be included in the calculations under
Subsection (any such amounts shall not be included in the
calculations under Subsection provided such use complies with the
requirements of Treasury Regulation Section 1.401(m)-l(b)(2) (or any
successor thereto).
6.5.7 For purposes of this Section , the following terms shall
have the following meaning:
6.5.7.1 "Actual Contribution Percentage" (or "ACP") shall
mean for the Highly Compensated Employees, as a group, and for
the Non-Highly Compensated Employees, as a group, the average of
the ratios (calculated separately for each Employee in such
group) of the amount of Company Matching Deposits paid to the
Trust for each such Employee for each Plan Year to the Employee's
Total Compensation, as defined in Subsection , for such Plan
Year.
In calculating ACP, a Company Matching Deposit shall be
taken into account for a Plan Year only if such Contribution: (i)
is made on account of the Employee's Before-Tax Deposits for the
Plan Year, (ii) is allocated to the Employee during such Plan
Year, and (iii) is paid to the Trust not later than the last day
of the twelfth (12th) month following the close of such Plan
Year.
In calculating ACP, all employee contributions and employer
matching contributions (as defined in Section 401(m)(4) of the
Code) of any Highly Compensated Employee who participates in more
than one plan maintained by an Affiliated Company shall be
aggregated for purposes of determining such percentage.
In calculating ACP, all employee contributions and employer
matching contributions (as defined in Section 401(m)(4) of the
Code) to any plan required to be aggregated with the Plan for
purposes of Code Section 401(a)(4) or 410(b) shall be treated as
if made under the Plan. If the Plan is permissively aggregated
with another plan in order to comply with the limitations of
Subsection , such aggregated plans must also meet the
requirements of Code Sections 401(a)(4) and 410(b) as a single
plan.
6.5.7.2"Highly Compensated Employee," "Eligible Employee,"
"Non-Highly Compensated Employee," "Total Compensation,"
"Aggregated Family Group," and "Family Member" shall all have the
meanings set forth in Subsection .
6.6 RIGHT TO CHANGE RATE OF, RESUME OR DISCONTINUE BEFORE-TAX
DEPOSITS.
6.6.1 An Active Participant may voluntarily suspend his Before-
Tax Deposits at any time by delivering to the Administrative Committee
written notification of his election to suspend said contributions on
the form prescribed for that purpose by the Administrative Committee.
Non suspension of Basic Before-Tax Deposits shall be effective unless
the Participant has already suspended or is simultaneously suspending
his Supplemental Before-Tax Deposits. Any such suspension shall be
effective as of the first day of the payroll period next following the
date which is seven (7) days after the date the Administrative
Committee receives such written notification.
6.6.2 A Participant may, in accordance with this Section, change
the rate of the Before-Tax Deposits made to the Trust on his behalf to
another rate permitted under Section , or to resume having made
Before-Tax Deposits in any amount permitted under Section , to the
Trust on his behalf provided that (i) any such change of rate shall be
effective on the first day of the calendar month next following the
date written notice of such change is received by the Administrative
Committee, and (ii) any such change shall be in whole percentages of
the Participant's Compensation. A Participant who desires to change
the rate of or to resume such contributions must notify the
Administrative Committee thereof in writing on forms specified by the
Administrative Committee.
6.7 WITHDRAWALS FROM PARTICIPANT ACCOUNTS.
6.7.1 Subject to the provisions of Subsections and , a
Participant, upon or after attaining age fifty-nine and one-half (59-
1/2 ) or upon meeting the conditions of hardship, may withdraw the
following amounts (determined as of the Valuation Date coincident with
or next following the date a written request for such withdrawal is
received by the Administrative Committee) from the following Accounts
in the following order: (i) all or any portion of the Participant's
previously unwithdrawn Cash Transfers From Another Qualified Plan
credited to his Rollover Account or the Rollover subaccount of his
Prior Plan Account, (ii) all or any portion of the current value of
previously unwithdrawn earnings in the Participant's Rollover Account
or the Rollover subaccount of his Prior Plan Account, (iii) all or any
portion of the Participant's previously unwithdrawn Supplemental
Before-Tax Deposits, and (iv) all or any portion of the Participant's
previously unwithdrawn Basic Before-Tax Deposits. No amount shall be
withdrawn under a succeeding clause until all amounts which may be
withdrawn under a preceding clause have been withdrawn (which
withdrawal may be simultaneous with the withdrawal under a succeeding
clause). Notwithstanding the foregoing, in no event shall a hardship
withdrawal of any amount allocated to a Participant's Accounts
pursuant to Subsection or or of any earnings or gains credited to a
Participant's Before-Tax Deposits be permitted.
The following provisions shall apply with respect to hardship
withdrawals:
6.7.1.1 Application for withdrawal must be made in writing
on a form approved by the Administrative Committee, and must set
out in detail the circumstances establishing that the proposed
withdrawal is for a Permitted Purpose.
6.7.1.2 The Administrative Committee's determination of
whether the application meets the requirements of this section
and the Code and regulations thereunder shall be final and
conclusive, and in making such determination, the Administrative
Committee shall follow uniform and nondiscriminatory rules.
6.7.1.3 If the Administrative Committee is satisfied that
the application meets the requirements of this section and the
Code and regulations thereunder, the application shall be
granted.
6.7.1.4 The expression "Permitted Purpose," as used in
this Subsection , means a withdrawal which is necessary in light
of immediate and heavy financial need of the Participant which is
(i) due to medical expenses described in Code Section 213
incurred by the Participant, the Participant's spouse or
dependents (as defined in Code Section 152) or necessary for such
persons to obtain medical care, (ii) for purchase of a principal
residence of the Participant, (iii) for payment of tuition for
the next twelve (12) months of post-secondary education for the
Participant or such Participant's immediate family, (iv) needed
to prevent eviction of the Participant from his principal
residence or foreclosure on the mortgage of the Participant's
principal residence, or (v) such other purposes as permitted by
the Commissioner of the Internal Revenue Service. Such payment
shall not be made unless the Committee determines the Participant
has obtained all distributions (other than hardship
distributions) and all nontaxable loans currently available under
all plans maintained by the Participating Company or any
Affiliated Company, and in no event will such payment exceed the
amount required to meet such financial need.
6.7.1.5 A distribution will not be deemed necessary in
light of immediate and heavy financial need of a Participant to
the extent the amount of the distribution is in excess of the
amount required to relieve the financial need or to the extent
such need can be satisfied from other resources reasonably
available to the Participant, as determined by the Administrative
Committee on the basis of all relevant facts and circumstances.
In making such determination, the Administrative Committee may
rely on a certification by the Participant that the financial
need cannot be relieved: (i) through reimbursement or
compensation by insurance or otherwise, (ii) by reasonable
liquidation of the Participant's (or the Participant's spouse's
or minor children's) assets, to the extent such liquidation would
not itself cause a hardship, (iii) by ceasing Before-Tax Deposits
to the Plan or contributions to other plans, or (iv) by other
distributions or loans from the Plan or any other plan, or by
borrowing from commercial sources on reasonable commercial terms,
in an amount sufficient to satisfy the need.
6.7.2 If, at any time, a Participant withdraws less than the
entire amount which is available for his withdrawal at such time from
all Accounts, then such Participant must withdraw a minimum amount
equal to Five Hundred Dollars ($500.00).
6.7.3 Notwithstanding the foregoing provisions of this Section ,
the Administrative Committee shall, subject to any terms and
conditions imposed by the Trustee, establish additional uniform
policies and procedures, including procedures regarding the manner in
which the amount of any withdrawal shall be obtained from the
Investment Funds referred to in Section hereof to which such
Participant has directed the investment of the amounts credited to his
Accounts.
6.7.4 All withdrawals from a Prior Plan Account shall be subject
to the spousal consent requirements of Section .
SECTION 7
ALLOCATION TO PARTICIPANTS' ACCOUNTS
7.1 METHODS OF ALLOCATING DEPOSITS.
7.1.1 Subject to the limitations of Section hereof and subject
to the provisions of Subsection hereof, the Company Matching Deposit
of each Participating Company for each calendar month pursuant to
Subsection above shall be allocated to the Company Matching Deposit
Account of the Participant on whose behalf said Company Matching
Deposit was made, as of the last day of such month.
7.1.2 Subject to the limitations of Section hereof and subject
to the provisions of Subsection hereof, any additional Company
Matching Deposits for a Plan Year made pursuant to Subsection above
shall be allocated as of the last day of such Plan Year to the Company
Matching Deposit Account of each Participant who is employed by a
Participating Company as of the last day of such Plan Year, in an
amount equal to a percentage of his Basic Before-Tax Deposits for the
Plan Year, as prescribed by the Board of Directors of the Sponsoring
Company.
7.1.3 Subject to the limitations of Section hereof, each
Participant's Basic and Supplemental Before-Tax Deposits for each
month shall be allocated to the appropriate Account as of the last day
of such month.
7.2 ALLOCATION TO A PARTICIPANT TRANSFERRED TO A PARTICIPATING
COMPANY. If, during a Plan Year, an Active Participant is transferred
from one Participating Company to another Participating Company, such
Participant's share of the Company Matching Deposits of each Participating
Company shall be determined on the basis of the Basic Before-Tax Deposits
made on behalf of such Active Participant for the portion of the Plan Year
that such Active Participant was employed by such Participating Company.
7.3 ALLOCATION TO A PARTICIPANT TRANSFERRED TO AN AFFILIATED COMPANY
WHICH HAS NOT ADOPTED THE PLAN. Notwithstanding any other provision of
the Plan, if a Participant is transferred from a Participating Company to
an Affiliated Company which has not adopted the Plan, he shall continue to
participate in the Plan as an Inactive Participant who has elected a
voluntary suspension of Basic and Supplemental Before-Tax Deposits. If
such Participant is subsequently reemployed by a Participating Company, he
shall be eligible to elect to have made on his behalf Basic and
Supplemental Before-Tax Deposits as of the Entry Date coincident with or
next following the Participant's reemployment, provided he complies with
the provisions of Section .
7.4 LIMITATIONS ON ANNUAL ADDITIONS. This Section is effective
July 1, 1988.
7.4.1 Notwithstanding any other provision of the Plan, the sum
of the Annual Additions to a Participant's Accounts for any Limitation
Year shall not exceed the lesser of (i) Thirty Thousand Dollars
($30,000) or, if greater, one-fourth (1/4) of the defined benefit
dollar limitation set forth in Section 415(b)(1)(A) of the Code as in
effect for the Limitation Year, or (ii) twenty-five percent (25%) of
such Participant's Limitation Year Compensation for the entire
Limitation Year (even though such Participant may not have been a
Participant for the entire Limitation Year). The term "Annual
Additions" to a Participant's Accounts for any Limitation Year shall
mean the sum of:
7.4.1.1 Such Participant's allocable share of the
contributions of the Participating Company, including Before-Tax
Deposits and Company Matching Deposits, credited to such
Participant within such Limitation Year;
7.4.1.2 Any amount allocated to an "individual medical
account," as defined in Section 415(l)(2) of the Code, which is
part of a pension or annuity plan maintained by a Participating
Company;
7.4.1.3 Any amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years ending after
such date, which are attributable to post-retirement medical
benefits allocated to the separate account of a key employee (as
defined in Section 419A(d)(3) of the Code) under a welfare
benefit fund (as defined in Section 419(e) of the Code)
maintained by a Participating Company;
7.4.1.4 Such Participant's allocable share of forfeitures,
if any, credited to such Participant within such Plan Year; and
7.4.1.5 Any Participant contributions;
provided, however, that the twenty-five percent (25%) limitation
set forth in Subsection (ii) above shall not apply to amounts
described in Subsection or above.
Solely for purposes of this Section , the determination of a
Participant's allocable share of Participating Company contributions
and forfeitures, if any, for a Limitation Year shall exclude any
Participating Company contributions and forfeitures allocated to such
Participant for any of the reasons set forth in Sections 1.415-
6(b)(2)(ii)-(vi) of the Income Tax Regulations (except as otherwise
provided in such Sections).
7.4.2 In the event that as a result of (i) the allocation of
forfeitures, (ii) a reasonable error in estimating a Participant's
Limitation Year Compensation, (iii) a reasonable error in determining
the amount of Before-Tax Deposits that may be made under this Section,
or (iv) other facts and circumstances which the Commissioner of
Internal Revenue or his delegate finds justify the availability of the
provisions of this Subsection and Subsections and , it is determined
that, but for the limitations contained in Subsection , the Annual
Additions to a Participant's Accounts for any Limitation Year would be
in excess of the limitations contained herein, such Annual Additions
shall be reduced to the extent necessary to bring such Annual
Additions within the limitations contained in Subsection in the
following order:
7.4.2.1 Such Participant's Supplemental Before-Tax
Deposits for the Plan Year ending within such Limitation Year
shall be reduced.
7.4.2.2 Such Participant's allocable share of Basic
Before-Tax Deposits and Company Matching Deposits for the Plan
Year ending within such Limitation Year shall be simultaneously
reduced on a pro-rata basis.
7.4.3 If the amount of any Participant's allocable share of
forfeitures, if any, or Company Matching Deposits is reduced in
accordance with Subsection above, the amount of such reduction shall
be maintained in a separate suspense account under the Trust to be
used solely to reduce forfeitures or Company Matching Deposits,
respectively, for that Participant for the next succeeding Limitation
Year (and succeeding Limitation Years, as necessary), if that
Participant is employed as of the end of such Limitation Year. If
such Participant is no longer employed as of the end of such next
succeeding Limitation Year (or succeeding Limitation Years, if
applicable), then the amount in the suspense account shall reduce
forfeitures or Company Matching Deposits, respectively, for such next
succeeding Limitation Year (and succeeding Limitation Years, if
applicable) and shall, subject to the provisions of Subsection , be
allocated and reallocated in such next succeeding Limitation Year (and
succeeding Limitation Years, if applicable), among the remaining
Participants in the Plan as if such amount were a forfeiture or
Company Matching Deposit, respectively, for the appropriate Limitation
Year. Any suspense account established pursuant to this Subsection
shall not be adjusted to reflect net income, loss, appreciation or
depreciation in the value of the Trust Fund as provided for a
Participant's regular Accounts pursuant to Section hereof.
7.4.4 If the amount of any Participant's Basic or Supplemental
Before-Tax Deposits are reduced in accordance with the provisions of
Subsection above, the amount of such reduction (the "Excess
Amounts"), adjusted for earnings or losses in a manner similar to
Section above, shall be distributed to such Participant, and shall be
disregarded for purposes of Section above.
7.4.5 In the event of termination of the Plan, the suspense
account established pursuant to this Section shall revert to the
Participating Company to the extent it may not then be allocated to
any Participant's Account.
7.5 LIMITATIONS ON ANNUAL ADDITIONS FOR PARTICIPATING COMPANIES OR
AFFILIATED COMPANIES MAINTAINING OTHER DEFINED CONTRIBUTION PLANS. In the
event that any Participant in this Plan is a participant under any other
Defined Contribution Plan maintained by a Participating Company or an
Affiliated Company (whether or not terminated), the total amount of annual
additions, as defined in Section 415(c) of the Code and regulations
thereunder, to such Participant's accounts from all such Defined
Contribution Plans shall not exceed the limitations set forth in
Subsection hereof. If such total amount of annual additions to each
Participant's accounts from all such Defined Contribution Plans does
exceed the limitations set forth in Subsection hereof, then the Annual
Additions to a Participant's Accounts in this Plan shall be reduced, and
such reduction shall be accomplished in accordance with the provisions of
Section hereof.
7.6 LIMITATIONS ON BENEFITS AND ANNUAL ADDITIONS FOR PARTICIPATING
COMPANIES OR AFFILIATED COMPANIES MAINTAINING DEFINED BENEFIT PLANS. In
the event that any Participant in this Plan is a participant under one or
more Defined Benefit Plans maintained by a Participating Company or an
Affiliated Company (whether or not terminated), then the sum of the
Defined Benefit Plan Fraction for such Limitation Year and the Defined
Contribution Plan Fraction for such Limitation Year shall not exceed one
(1.0). If the sum of the Defined Benefit Plan Fraction for any Limitation
Year and the Defined Contribution Plan Fraction for such Limitation Year
does exceed one (1.0), then the annual additions to a Participant's
Accounts under this Plan shall be reduced subsequent to reductions under
any Defined Benefit Plan.
7.7 DEFINITIONS RELATING TO ANNUAL ADDITION LIMITATIONS. For
purposes of Sections , and hereof and this Section , the following
definitions shall apply:
7.7.1 "Retirement Plan" shall mean (a) any profit sharing,
pension or stock bonus plan described in Sections 401(a) and 501(a) of
the Code, (b) any annuity plan or annuity contract described in
Section 403(a) or 403(b) of the Code, (c) any simplified employee
pension plan described in Section 408(k) of the Code and (d) any
individual retirement account or individual retirement annuity
described in Section 408(a) or 408(b) of the Code.
7.7.2 "Defined Contribution Plan" shall mean a Retirement Plan
which provides for an individual account for each participant and for
benefits based solely on the amount contributed to the participant's
accounts, and any income, expenses, gains or losses, and any
forfeitures of accounts of other participants which may be allocated
to such participant's account.
7.7.3 "Defined Benefit Plan" shall mean any Retirement Plan
which does not meet the definition of a Defined Contribution Plan.
7.7.4 "Defined Benefit Plan Fraction" shall mean a fraction
calculated in accordance with Code Section 415(e)(2).
7.7.5 "Defined Contribution Plan Fraction" shall mean a
fraction, the numerator of which is the sum of the Annual Additions to
the Participant's account under all the Defined Contribution Plans
(whether or not terminated) maintained by the Participating Companies
or any Affiliated Company for the current and all prior Limitation
Years, (including the Annual Additions attributable to the
Participant's nondeductible employee contributions to this and all
other Defined Contribution Plans, whether or not terminated,
maintained by the Participating Companies or any Affiliated Company),
and the denominator of which is the sum of the Maximum Aggregate
Amounts for the current and all prior Limitation Years of service with
the Participating Companies or any Affiliated Company (regardless of
whether a Defined Contribution Plan was maintained by the
Participating Companies or any Affiliated Company). The "Maximum
Aggregate Amount" in any Limitation Year is the lesser of one hundred
twenty-five percent (125%) of the dollar limitation in effect under
Section 415(c)(1)(A) of the Code or one hundred forty percent (140%)
of the amount which may be taken into account under Section
415(c)(1)(B) of the Code.
7.7.6 "Limitation Year" shall mean the twelve (12) consecutive
month period ending on December 31.
7.7.7 "Limitation Year Compensation" shall mean the aggregate of
(i) all wages, salaries and other amounts received for personal
services actually rendered in the course of employment with all
Participating Companies and Affiliated Companies (including, but not
limited to, commissions paid salesmen, compensation for services on
the basis of a percentage of profits, commissions on insurance
premiums, tips, fringe benefits, expense accounts and bonuses) which
are actually paid or made available to a Participant within a
Limitation Year; (ii) in the case of a Participant who is an employee
within the meaning of Code Section 401(c)(1), the Participant's earned
income (as described in Code Section 401(c)(2)); (iii) amounts
described in Code Sections 104(a)(3), 105(a) and 105(h), but only to
the extent that these amounts are includable in the gross income of
the Participant; (iv) amounts paid or reimbursed for moving expenses
incurred by a Participant, but only to the extent that these amounts
are not deductible by the Participant under Code Section 217; (v) the
value of a non-qualified stock option granted to a Participant but
only to the extent that the value of the option is includable in the
gross income of the Participant for the taxable year in which granted;
(vi) the amount includable in the gross income of a Participant upon
making the election described in Code Section 83(b); which are
actually paid or made available (or, for Limitation Years beginning
prior to December 31, 1991, accrued, if the Company properly so
elected) to a Participant within a Limitation Year. Paragraphs (i)
and (ii) of this section include foreign earned income (as defined in
Code Section 911(b)), whether or not excludable from gross income
under Code Section 911. Limitation Year Compensation shall not
include the following:
7.7.7.1 Contributions made by any Participating Company or
Affiliated Company to a plan of deferred compensation to the
extent that before the application of the Section 415 limitations
to the Plan, the contributions are not included in the gross
income of the Participant for the taxable year in which
contributed, or contributions made by any Participating Company
or Affiliated Company under a simplified employee pension plan to
the extent the contributions are deductible by the Participant,
and any distributions from a plan of deferred compensation;
7.7.7.2 Amounts realized from the exercise of a non-
qualified stock option, or when restricted stock (or property)
held by a Participant become freely transferable or is no longer
subject to a substantial risk of forfeiture;
7.7.7.3 Amount realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
7.7.7.4 Other amounts that receive special tax benefits,
such as premiums for group term life insurance (but only to the
extent that premiums are includable in the gross income of the
Participant), or contributions made by any Participating Company
or Affiliated Company (whether or not under a salary reduction
agreement) towards the purchase of an annuity contract as
described in Section 403(b) of the Code (whether or not the
contributions are excludable from the gross income of the
Participant).
SECTION 8
VALUATION OF TRUST FUND
The Trustee shall evaluate the Trust Fund (separately itemized with
respect to each Investment Fund under Section hereof) at fair market
value as of the close of business on each Valuation Date. In making such
valuations, except as otherwise provided for herein or in a Trust
Agreement, the Trustee shall use the modified cash basis method of
accounting and shall deduct all charges, expenses and other liabilities,
if any, then chargeable against the Trust Fund, in order to give effect to
income realized and expenses paid, losses sustained and unrealized gains
or losses constituting appreciation or depreciation in the value of Trust
investments since the last previous valuation. At the request of the
Administrative Committee, as soon as practicable after such valuation, the
Trustee shall deliver in writing to the Administrative Committee a
valuation of the Trust Fund together with a statement of the amount of net
income or loss (including appreciation or depreciation in the value of
Trust investments) since the last previous valuation.
SECTION 9
PARTICIPANTS' ACCOUNTS
9.1 SEPARATE ACCOUNTS. Subject to the provisions of Section hereof,
the Administrative Committee shall maintain for each Participant a
separate Company Matching Deposit Account, a separate Basic Before-Tax
Deposit Account, a separate Supplemental Before-Tax Deposit Account, a
separate Prior Plan Account as necessary, and a separate Rollover Account
as necessary. The amount contributed by or on behalf of a Participant or
allocated to such Participant shall be credited to the appropriate Account
in the manner set forth in Sections and hereof. All payments to a
Participant or his Beneficiaries shall be charged against the respective
Accounts of such Participant.
9.2 ACCOUNTS OF PARTICIPANTS TRANSFERRED TO AN AFFILIATED COMPANY.
If a Participant is transferred to an Affiliated Company which has not
adopted the Plan, the amount in the Trust which is credited to his
Accounts shall continue to share in the earnings or losses of the Trust
and such Participant's rights and obligations with respect to such
Accounts shall be governed by the provisions of the Plan and Trust.
9.3 ADJUSTMENT OF PARTICIPANT'S ACCOUNTS. Except as otherwise
provided herein, the Administrative Committee shall adjust the Accounts of
each Participant so that the amount of net income, loss, appreciation or
depreciation in the value of the Trust Fund (as appropriately itemized
with respect to each Investment Fund under Section hereof) for the period
(herein referred to as the "Valuation Period") from the last previous
valuation to the date of such valuation shall be credited to or charged
against the balance in the Participants' Accounts as adjusted by the
transactions occurring with respect to each such Account during such
Valuation Period. Any Plan earnings or losses attributable to the
investment of a Participant's Account under the Plan in a loan to the
Participant under Section shall be allocated solely to that Participant's
Account in accordance with the procedures of Section .
9.4 ACCOUNT INVESTMENT DIRECTION.
9.4.1 Notwithstanding any other provision of the Plan or the
Trust Agreement with respect to control over and direction of the
investment of assets in the Trust Fund, each Participant may, at such
time and in such manner as the Administrative Committee shall
determine pursuant to a uniform policy established by it, direct that
all or any part (subject to such percentage increment limitations as
the Administrative Committee shall determine from time to time) of the
amounts constituting such Participant's existing Account and his
future Basic and Supplemental Before-Tax Deposits and Company Matching
Deposit be invested among such investment funds as the Administrative
Committee shall offer from time to time ("Investment Funds") for
direction by Participants. This Section is intended to meet the
requirements of Section 404(c) of ERISA by allowing each Participant
to direct the investment of his individual Accounts.
9.4.2 The Administrative Committee shall from time to time
designate the Investment Funds available hereunder, provided that at
all times there shall be at least three diversified Investment Funds
having materially different risk and reward characteristics in
addition to the Arkansas Best Stock Fund. The assets of each such
Investment Fund may be invested in shares of a registered investment
company, provided that such shares constitute securities described in
Section 401(b)(1) of ERISA. Moneys in any such Fund in amounts
estimated by the Trustee to be needed for cash withdrawals, inter-Fund
transfers or other purposes, or in amounts too small to be reasonably
invested, may be retained by the Trustee in cash or invested in a
manner consistent with such purposes.
9.4.3 At such times as the Administrative Committee shall
permit, and in such manner as the Administrative Committee shall
determine, pursuant to uniform policies established by it, each
Participant may (i) direct that all, or any part (subject to such
percentage increment limitations as the Administrative Committee shall
determine from time to time) of the amounts in the Participant's
Accounts which are invested on his behalf in any of the Investment
Funds, be liquidated and the proceeds thereof reinvested in the other
Investment Funds and (ii) redirect the investment of future Before-Tax
Deposits and Company Matching Deposits (and future earnings on all
such amounts) in accordance with the provisions of Subsection hereof.
In the event at any time a Participant does not elect to redirect any
Account balances or future contributions as provided for in this
Subsection , then such Participant's prior directions shall remain in
effect.
9.4.4 The Trustee shall carry out Participant's directions or
redirections permitted by this Section (or in the absence of
directions, shall invest as provided in Subsection hereof) as soon as
administratively practicable. Notwithstanding the foregoing, in the
event a Participant has directed that only part of his interest in any
of the Investment Funds be liquidated and reinvested in one or more of
the other Investment Funds only the nearest value of whole units will
be liquidated and reinvested.
9.4.5 If a Participant fails or refuses to exercise any of his
investment direction rights as provided for in this Section , the
Trustee shall invest all amounts (not otherwise directed) in the
lowest risk Investment Fund available, as determined by the
Administrative Committee.
9.4.6 The Administrative Committee shall establish and maintain,
or cause the appropriate Trustee to establish and maintain procedures
and records which will adequately reflect the state of each Investment
Fund and the proportionate interest of each Participant in each
Investment Fund, including the amount of each Participant's various
Accounts allocated to each such Investment Fund.
9.4.7 Proxy Voting. Shares of stock held in the Arkansas Best
Stock Fund shall be voted in accordance with Subsection below. Any
shares of a registered investment company allocated to a Participant's
Account shall be voted in accordance with directions of the
Participant (or Beneficiary or Alternate Payee), with any fractional
shares being voted on a combined basis to the extent possible to
reflect the directions of voting Participants. The Trustee or a duly
appointed Investment Manager shall be responsible for the voting of
any other securities within an Investment Fund and the exercise of any
tender offer or redemption rights with respect to any such securities.
9.5 ARKANSAS BEST STOCK FUND.
9.5.1 The Arkansas Best Stock Fund shall be one of the
Investment Funds available for the investment of any portion of a
Participant's Account in accordance with Section . The Arkansas Best
Stock Fund may be partially invested in cash, cash-equivalents, or
short-term investments as needed to meet liquidity requirements, or in
amounts that are too small to reasonably invest in Arkansas Best
Stock.
9.5.2 Except as provided in Subsection , all assets of the
Arkansas Best Stock Fund shall be invested and reinvested exclusively
in Arkansas Best Stock.
9.5.3 All shares of Arkansas Best Stock in the Arkansas Best
Stock Fund shall be voted by the Trustee in such manner as may be
directed by the respective Participants, Beneficiaries and Alternate
Payees, with fractional shares being voted on a combined basis to the
extent possible to reflect the direction of the voting Participants.
In the event that there is a tender offer or exchange offer for
outstanding shares of Arkansas Best Stock, each Participant,
Beneficiary and Alternate Payee shall be permitted to elect whether
shares of Company Stock held in his Account should be tendered or
exchanged. Rights to tender or exchange with respect to shares
allocated to a Participant's Account with respect to which direction
has not been received by the Trustee shall not be tendered or
exchanged but shall continue to be held by the Trust.
9.5.4 Subject to the provisions of the Plan and Trust, the
Arkansas Best Stock Fund may sell shares of Arkansas Best Stock to any
person (including the issuer of such shares), provided that any sale
to a party in interest must be made for not less than adequate
consideration. No commission shall be paid with respect to sales or
purchases of Arkansas Best Stock from parties-in-interest. The sale
price for each such share of Arkansas Best Stock sold to a party-in-
interest shall not be less than the price of Arkansas Best Stock,
prevailing at the time of sale, on a national securities exchange
which is registered under section 6 of the Securities Exchange Act of
1934, or, if Arkansas Best Stock is not, at the time of such purchase,
traded on such national securities exchange, shall be not more than
the offering price for the Arkansas Best Stock as established by the
current bid and asked prices quoted by persons independent of the
Sponsoring Company and of any party-in-interest. In the event that
either (i) the sale price per share from the Sponsoring Company as
determined pursuant to the foregoing is less than the then par value
of such Arkansas Best Stock, or (ii) Trustee is of the opinion that
the sale of such shares directly to the Sponsoring Company or a party-
in-interest might involve a possible violation of any federal or state
securities law, or any rule or regulation thereunder, Trustee shall
not sell such shares directly to the Sponsoring Company, but shall
sell such shares in the open market in exchange transactions or in any
other lawful manner.
9.5.5 SECURITIES LAW RESTRICTION. Notwithstanding anything to
the contrary contained in the Plan, the Administrative Committee may,
in its sole discretion, restrict any Plan transactions involving
Arkansas Best Stock to insure that the operation of the Plan complies
with Rule 16(b)(3), promulgated under the Securities Exchange Act of
1934, as amended.
SECTION 10
COMMON TRUST FUND
Except as otherwise provided in accordance with procedures adopted
under Subsection hereof, the fact that for administrative purposes the
Administrative Committee maintains separate accounts for each Participant
shall not be deemed to segregate for such Participant, or to give such
Participant any direct interest in any specific assets in the Trust Fund
held by the Trustee. Except as provided herein, all such assets may be
held and administered by the Trustee as a commingled fund, subject to the
provisions of Section hereof.
SECTION 11
DESIGNATION OF BENEFICIARIES
11.1 PARTICIPANT'S DESIGNATION.
11.1.1 Subject to the provisions of Sections , and hereof
and of Subsection below, each Participant may designate a Beneficiary
or Beneficiaries, and contingent Beneficiary or Beneficiaries, if
desired, including the executor or administrator of his estate, to
receive his interest in the Trust Fund in the event of his death, but
the designation of a Beneficiary shall not be effective for any
purpose unless and until it has been filed with the Administrative
Committee on the form provided therefor. If the Participant has a
surviving spouse and the deceased Participant failed to name a
Beneficiary in the manner herein prescribed, or the Beneficiary or
Beneficiaries so named predecease the Participant, the amount, if any,
which is payable hereunder with respect to such deceased Participant
shall be paid to the surviving spouse. If the Participant does not
have a surviving spouse and the deceased Participant failed to name a
Beneficiary in the manner herein prescribed, or the Beneficiary or
Beneficiaries so named predecease the Participant, the amount, if any,
which is payable hereunder in respect of such deceased Participant may
be paid, in the discretion of the Administrative Committee, either to
(a) all or any one (1) or more of the persons comprising the group
consisting of such Participant's descendants, parents, or heirs at
law, and the Administrative Committee may pay the entire benefit to
any member of such group or apportion such benefit among any two (2)
or more of them in such shares as the Administrative Committee, in its
sole discretion, shall determine, or (b) the executor or administrator
of the estate of such deceased Participant, provided that in any of
such cases payment shall be made in the form of an immediate lump sum
as provided in Subsection . If the Administrative Committee does not
so direct any of such payments, the Administrative Committee may elect
to have a court of applicable jurisdiction determine to whom a payment
or payments should be made. Any payment made to any person pursuant
to the power and discretion conferred upon the Administrative
Committee by the preceding sentence shall operate as a complete
discharge of all obligations under the Plan in respect of such
deceased Participant and shall not be subject to review by anyone, but
shall be final, binding and conclusive on all persons ever interested
hereunder.
11.1.2 Subject to the provisions of Subsection below, a
Participant may from time to time change any Beneficiary designated by
him without notice to such Beneficiary, under such rules and
regulations as the Administrative Committee may from time to time
promulgate, but the last Beneficiary designation filed with the
Administrative Committee shall control.
11.2 QUALIFIED CONSENT. Except as provided in Section , with respect
to a Participant who on the date of such Participant's death, is survived
by and has been married to the same spouse continuously for a period of at
least one (1) year, such Participant's Accounts shall, on his death, be
paid to such surviving spouse to whom he was married at the date of his
death unless the surviving spouse has made a Qualified Consent to the
payment of any or all of said Accounts to a designated Beneficiary other
than the surviving spouse. "Qualified Consent" means an irrevocable
written consent executed by the Participant's spouse which acknowledges
the effect of the consent and is witnessed by a Plan representative or a
notary public. A Participant may, after obtaining a Qualified Consent,
change his Beneficiary designation as permitted by Subsection above, but
any such change is subject to the requirements of this Section and will
require another Qualified Consent should such a spouse, if surviving, not
be the sole Beneficiary of all amounts in said Account, unless a Qualified
Consent previously executed by such spouse expressly authorizes changes in
the Beneficiary without further consent of the spouse. A Qualified
Consent is effective only with respect to the spouse who executes it. If
the Plan Administrator is satisfied that there is no spouse, or that the
spouse cannot reasonably be located, or in such other circumstances as
permitted by governmental regulations, no Qualified Consent shall be
required as a condition to payment to a Beneficiary who is not the
surviving spouse.
11.3 PRIOR PLAN ACCOUNT DEATH BENEFITS.
11.3.1 GENERAL. Notwithstanding Section , where a Participant
has an amount allocated to his or her Prior Plan Account, then upon
the Participant's death the unpaid portion of the Prior Plan Account
(hereinafter, in this Section only, the "PPA Death Benefit") shall be
composed of a Spousal Benefit (if any) and a Beneficiary Benefit. For
these purposes, a "Spousal Benefit" is fifty percent (50%) of the
Participant's Prior Plan Account at the time of reference, and a
"Beneficiary Benefit" is the remaining fifty percent (50%) of the
Participant's Prior Plan Account at the time of reference; provided,
however, that if the Participant does not have a surviving spouse on
the date of his death, then the Spousal Benefit is zero, and his
Beneficiary Benefit shall be one hundred percent (100%) of his Prior
Plan Account at the time of reference.
11.3.2 NO PPA QUALIFIED BENEFICIARY DESIGNATION FORM FILED.
If a Participant dies without having executed and delivered to the
Administrator a PPA Qualified Beneficiary Designation Form, then all
of his or her PPA Death Benefits shall be paid to his or her surviving
spouse or, in the absence of a surviving spouse, then to his or her
lawful descendants then living, per stirpes and not per capita, or if
none, then to his or her estate.
11.3.3 PPA QUALIFIED BENEFICIARY DESIGNATION FORM, WITH
SPOUSAL CONSENT, FILED. If the Participant either attains age 35, or
separates before the age of 35 and, in either case, thereafter
executes and delivers to the Administrator a PPA Qualified Beneficiary
Designation Form (i) that contains a Qualified Spousal Consent, or
(ii) the Participant dies without a surviving spouse, then all of the
Participant's Death Benefits shall be paid to his designated
Beneficiary.
11.3.4 PPA QUALIFIED BENEFICIARY DESIGNATION FORM, NO SPOUSAL
CONSENT, FILED. If (1) the Participant delivers to the Administrator
a PPA Qualified Beneficiary Designation Form, and then dies, prior to
the attainment of age 35 while still an Employee, or (2) the
Participant: (i) attains the age of 35, or (ii) separates before the
age of 35, and in either case thereafter executes and delivers to the
Administrator a PPA Qualified Beneficiary Designation Form which does
not include a Spousal Consent, and if such Participant has a surviving
spouse at the date of his death, then his Beneficiary Benefit shall be
paid to his designated Beneficiary, and his Spousal Benefit shall be
paid to his surviving spouse.
11.3.5 FORM OF PAYMENT. A Participant's Beneficiary Benefit
shall be paid in a lump sum cash payment, as soon as reasonably
possible following the date of the Participant's death, but in no
event to exceed five (5) years from the date of his death. A
Participant's Spousal Benefit either: (i) shall be used to purchase a
lifetime annuity from an insurance company, under which annuity
payment shall commence not later than the date on which the
Participant would have attained the age of 70 1/2 if the Participant
had survived, and which shall be distributed to his surviving spouse,
or (ii) at the written request of such surviving spouse, shall be paid
in a lump sum cash payment.
11.3.6 The Administrator shall provide a written explanation
of his right to file, and revoke, a PPA Qualified Beneficiary
Designation Form to each Participant: (i) if he enters the Plan prior
to age 32, then within the period beginning on 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, (ii) if the Participant enters the Plan
after the first day of the Plan Year in which the Participant attained
age 32, no later than the close of the Second Plan Year following the
entry of the Participant into the Plan, and (iii) if the Participant
terminates employment before age 32, and if no distribution from his
Prior Plan Account is made prior to the first anniversary of his
Termination of Employment, no later than the first anniversary of his
Termination of Employment.
11.3.7 DEFINITIONS. For purposes of this :
11.3.7.1 "PPA Qualified Beneficiary Designation Form" shall
mean a beneficiary designation which is on a form provided by the
Plan Administrator for that purpose, which has been properly
filled out, signed by the Participant, notarized where required
by law, and which has actually been received by the Plan
Administrator prior to the date of the Participant's death,
provided further, and without limiting the generality of the
foregoing, that such form need not have a Qualified Spousal
Consent.
11.3.7.2 "Qualified Spousal Consent" shall mean the consent
of a surviving spouse, as evidenced by the proper execution by
the surviving spouse of a PPA Qualified Beneficiary Designation
Form, to the Participant's designation of a beneficiary other
than such surviving spouse to receive all or any portion of the
Spousal Benefit. Such consent must acknowledge the spouse's
understanding of the effect of such consent and must be notarized
by a Notary Public or witnessed by the Plan Administrator. Even
if the surviving spouse shall not execute the PPA Qualified
Beneficiary Designation Form, the surviving spouse shall be
deemed to have properly executed the Qualified Beneficiary
Designation Form if the Plan Administrator determines that actual
execution is not required by law or if the Participant
establishes to the satisfaction of the Administrator that such
consent cannot be obtained because there is no spouse, because
the spouse cannot be located, or because of other reasons
permitted under applicable Regulations.
11.3.8 The provisions of Subsections through shall not apply
to the extent they conflict with a Qualified Domestic Relations Order.
SECTION 12
DISABILITY BENEFITS
12.1 DISABILITY RETIREMENT BENEFITS. A Participant retires by
reason of Total and Permanent Disability while in a Participating
Company's or an Affiliated Company's employ or on Leave of Absence, his
Company Matching Deposit Account shall fully vest and, subject to the
provisions of Section hereof, he shall be entitled to receive benefits
equal to the total amount in all of his Accounts under the Plan, as
determined in accordance with the provisions of Section hereof. Such
benefits shall be paid as provided in Subsection and Section hereof.
12.2 DETERMINATION OF DISABILITY. The Administrative Committee shall
determine whether a Participant has suffered Total and Permanent
Disability and its determination in that respect is binding upon the
Participant, provided that the Administrative Committee shall rely upon
professional medical advice in making such determination. In making its
determination, the Administrative Committee may require the Participant to
submit to medical examinations by doctors selected by the Administrative
Committee. The provisions of this Section shall be uniformly and
consistently applied to all Participants.
SECTION 13
RETIREMENT AND DEATH BENEFITS
13.1 RETIREMENT BENEFITS. A Participant's Company Matching Deposit
Account shall fully vest and be nonforfeitable on his Retirement Date,
provided such Participant is employed by a Participating Company or an
Affiliated Company on such date. A Participant who continues in the
Participating Company's employ after his Retirement Date shall continue to
be a Participant in the Plan until his actual retirement. Subject to the
provisions of Section hereof, any Participant who retires under this
Section shall be entitled to receive benefits equal to the total amounts
in all of his Accounts under the Plan as determined in accordance with the
provisions of Section hereof. Such benefit shall be paid as provided in
Subsection and Section hereof.
13.2 DEATH BENEFITS. Upon the death of a Participant while in the
employ of a Participating Company, an Affiliated Company or on Leave of
Absence, his Company Matching Deposit Account shall fully vest and,
subject to the provisions of Sections and hereof, the following person
or persons shall be entitled to receive benefits equal to the total
amounts in the deceased Participant's Accounts under the Plan as
determined in accordance with the provisions of Subsection and Section
hereof:
13.2.1 In the case of a Participant who is married as of the
date of his death, except as provided in Subsection below, his
surviving spouse.
13.2.2 In the case of a Participant who is married on the date
of his death but who has designated a Beneficiary other than his
surviving spouse pursuant to Section hereof and (i) whose surviving
spouse has executed a Qualified Consent as provided for in Section
hereof or (ii) who has not been married to the same spouse
continuously for at least one (1) year as of the date of his death,
his designated Beneficiary pursuant to Section hereof.
13.2.3 In the case of a Participant who is not married on the
date of his death, his designated Beneficiary pursuant to Section
hereof.
Upon the death of a Participant who is no longer employed by a
Participating Company or an Affiliated Company prior to the receipt by
such Participant of all amounts to which such Participant is entitled
under the provisions of the Plan, the person or persons entitled to
receive death benefits as hereinabove provided shall be entitled to
receive the balance of any amounts owing to such deceased Participant, as
determined and to be paid in accordance with the provisions of Subsection
and Section hereof.
SECTION 14
EMPLOYMENT TERMINATION BENEFITS
14.1 VESTING UPON TERMINATION OF EMPLOYMENT. Subject to the
provisions of Sections and hereof, in the event of the Termination of
Employment of a Participant, such Participant shall be entitled to receive
(i) one hundred percent (100%) of the amounts in all of his Accounts other
than his Company Matching Deposit Account and the Company Matching Deposit
subaccount of his Prior Plan Account, and (ii) the following percentage of
the amount in his Company Matching Deposit Account and the Company
Matching Deposit subaccount of his Prior Plan Account, based upon such
Participant's number of Vesting Years of Service prior to such Termination
of Employment:
Number of Vesting
YEARS OF SERVICE VESTED PERCENTAGE
Less than 5 years None
5 years or more 100%
Such benefits shall be paid as provided in Section hereof.
14.2 DETERMINATION OF VESTING YEARS OF SERVICE. All Vesting Years of
Service (whether or not continuous) shall be taken into account, except
Vesting Years of Service not taken into account in accordance with Section
hereof.
14.3 PERIODS OF SEVERANCE. Subject to the provisions of Section
hereof, Vesting Years of Service shall be disregarded as follows:
14.3.1 [Reserved].
14.3.2 In the case of any Participant who suffers a
Termination of Employment and who has no vested amount in his Basic or
Supplemental Before-Tax Deposit Accounts, or his Prior Plan Company
Matching Deposits subaccount, his Company Matching Deposit Account in
accordance with the provisions of Section hereof, Vesting Years of
Service before any period of One-Year Periods of Severance shall not
be taken into account if such Participant's latest Period of Severance
equals or exceeds the greater of (i) five (5) consecutive One-Year
Periods of Severance, or (ii) his aggregate Periods of Service before
the commencement of such latest Period of Severance. Such aggregate
Periods of Service before the commencement of such latest Period of
Severance shall be deemed not to include any Period of Service not
required to be taken into account under this Section by reason of any
prior Period of Severance. Such aggregate Periods of Service shall be
deemed not to include any Vesting Year of Service which precedes a
One-Year Period of Severance if as of or prior to December 31, 1984,
the duration of the consecutive One-Year Periods of Severance measured
in years equals or exceeds the Participant's Vesting Years of Service
prior to the One-Year Periods of Severance.
14.3.3 In the case of any Participant who has five (5)
consecutive One-Year Periods of Severance, Vesting Years of Service
after such five (5) year period shall not be taken into account for
purposes of determining the vested amount in his Company Matching
Deposit Account or his Prior Plan Company Matching Deposits subaccount
which accrued prior to such five (5) year period.
14.4 FORFEITURE OF NON-VESTED AMOUNT.
14.4.1 In the case of any Participant who has suffered a
Termination of Employment and who has received a distribution of the
vested amount in his Company Matching Deposit Account and his Basic
and Supplemental Before-Tax Deposit Accounts and his Prior Plan
Account, if any (the "Vested Amount"), on or prior to the last day of
the second (2nd) Plan Year following the Plan Year in which such
Termination of Employment occurs, the excess, if any, of the amount in
his Company Matching Deposit Account over the vested amount in such
Account (the "Non-Vested Amount") shall be forfeited upon such
Termination of Employment.
14.4.2 In the case of any Participant who has suffered a
Termination of Employment and who has no Vested Amount at the time of
such Termination of Employment, the amount in his Company Matching
Deposit Account and the Company Matching Deposits subaccount of his
Prior Plan Account shall be forfeited as of the last day of the second
(2nd) Plan Year following the Plan Year during which such Participant
suffers such Termination of Employment.
14.4.3 In the case of any Participant who has suffered a
Termination of Employment and who has not received a distribution of
the Vested Amount on or prior to the last day of the second (2nd) Plan
Year following the Plan Year in which such Termination of Employment
occurs, the Non-Vested Amount shall be forfeited as of the last day of
the Plan Year in which the Participant incurs five (5) consecutive
One-Year Periods of Severance.
14.4.4 Subject to the provisions of Subsection hereof,
forfeited, Non-Vested Amounts shall first reduce the Company Matching
Deposits of each Participating Company under Subsection , then at the
sole discretion of the Administrative Committee, they may be used to
reduce reasonable costs, charges and expenses incurred in the
administration of the Plan (as described in Section 5.13 hereof) which
were incurred during the Plan Year of reference. If the amount
forfeited with respect to a Plan Year exceeds the amounts described in
the prior sentence, the excess shall be treated as an increase in the
specified percentage determined in accordance with Subsection for the
Plan Year.
14.5 RESTORATION OF FORFEITED NON-VESTED AMOUNT.
14.5.1 In the event a Participant: (i) who has received a
distribution of the vested amount in his Company Matching Deposit
Account or his Prior Plan Company Matching Deposit subaccount in
accordance with Section hereof, or (ii) who has no vested amount in
his Company Matching Deposit Account or his Prior Plan Company
Matching Deposit subaccount at the time of his Termination of
Employment as described in Subsection hereof returns to employment
with a Participating Company as an Employee prior to the date on which
such Participant has incurred five (5) consecutive One-Year Periods of
Severance, the amount in such Participant's Company Matching Deposit
Account and his Prior Plan Company Matching Deposit subaccount which
was forfeited pursuant to Section hereof (without adjustment for any
gains or losses in the Trust Fund subsequent to such forfeiture) shall
be restored to such Participant's Company Matching Deposit Account and
his Prior Plan Company Matching Deposit subaccount; provided, however,
that if a Participant received a distribution of the vested amount of
his Company Matching Deposit Account and his Prior Plan Company
Matching Deposit subaccount and is reemployed by a Participating
Company as an Employee more than one year after his Termination of
Employment, such restoration shall not occur unless and until: (i)
such Participant repays to the Plan the full amount of his Company
Matching Deposit Account and his Prior Plan Company Matching Deposit
subaccount previously distributed to him, and (ii) such Participant's
repayment is made before the earlier of the end of (I) the five (5)
year period beginning with the Participant's date of reemployment or
(II) a period of five (5) consecutive One-Year Periods of Severance
commencing after the date on which such Participant received such
distribution. Upon the restoration of a Participant's Company
Matching Deposit Account and his Prior Plan Company Matching Deposit
subaccount as provided for hereinabove, the vested amount in such
Participant's Company Matching Deposit Account and his Prior Plan
Company Matching Deposit subaccount (whether attributable to amounts
restored, amounts, if any, repaid by the Participant or additional
amounts added to such Account after such reemployment) shall
thereafter be determined in accordance with the provisions of this
Section without regard to such Participant's original Termination of
Employment.
14.5.2 The restoration of a Participant's Non-Vested Amount in
his Company Matching Deposit Account and his Prior Plan Company
Matching Deposit subaccount as provided for in Subsection above,
shall be made from the Non-Vested Amounts forfeited pursuant to
Section hereof during the Plan Year of such restoration before any
use of such forfeitures as provided in Subsection hereof. In the
event there are not sufficient forfeitures to restore the entire
amount owing to Participants under Subsection above, the additional
amount necessary for restoration shall be contributed by the
Participating Company employing such Participant as a special
contribution to be allocated to the Company Matching Deposit Account
or Prior Plan Account of the affected Participant.
SECTION 15
PAYMENT OF BENEFITS
15.1 AMOUNT OF PAYMENT. Upon a Participant's retirement, Total and
Permanent Disability, death or Termination of Employment, he or his
Beneficiary shall be entitled to an amount computed in accordance with the
provisions of Sections , or , as applicable.
15.2 METHOD OF AND TIME FOR DISTRIBUTION OF BENEFITS.
15.2.1 Subject to Section , upon a Participant's Termination
of Employment, retirement, Total and Permanent Disability or death,
the Participant or, if applicable, the Beneficiary, may elect
distribution in the form of a lump sum payment of the vested amounts
in the Participant's Accounts valued as of the most recent available
Valuation Date preceding the date of distribution, paid as soon as
administratively practicable following the Participant's request for
distribution. For Prior Plan Accounts only, the Participant or
Beneficiary may elect distribution in the form of substantially equal
annual, quarterly or monthly installments payable over a ten (10) year
period.
15.2.2 Notwithstanding any other provision of this Section to
the contrary, if the vested amounts in the Participant's Accounts
(other than his Rollover Account) do not exceed Three Thousand Five
Hundred Dollars ($3,500), distribution shall be made as provided in
Subsection , as if the Participant had requested distribution within
sixty (60) days after the date the Participant terminated employment.
15.2.3 Subject to the provisions of this Section , if a
Participant or his Beneficiary is entitled to a distribution pursuant
to Section , or hereof, such amounts shall be distributed not later
than the sixtieth (60th) day after the close of the Plan Year in which
occurs the latest of:
15.2.3.1 The date on which the Participant attains or would
have attained sixty-five (65) years of age;
15.2.3.2 The tenth (10th) anniversary of the year in which
the Participant commenced participation in the Plan; or
15.2.3.3 The Participant's termination of employment or
death.
15.2.4 Notwithstanding any other provision of this Section to
the contrary, no distribution shall be made before the earlier of the
Participant's Retirement Date or death without the Participant's
written consent to the commencement of such distribution obtained not
more than ninety (90) days prior to such commencement of distribution,
if the combined vested value of such Participant's Company Matching
Deposit Account, and Basic and Supplemental Before-Tax Deposit
Accounts as of such date exceeds Three Thousand Five Hundred Dollars
($3,500).
15.2.5 Explanation to Participants: no less than 30 days and
no more than 90 days prior to commencement of distribution, the
Participant must be furnished with a general description of the
material features, and an explanation of the relative values of any
optional forms of distribution available to him under this Section,
and, if applicable, of his right to defer distribution.
A distribution may commence less than 30 days after the notice
required under section 1.411(a)-11(c) of the Income Tax Regulations is
given, provided that:
15.2.5.1 the Plan Administrator clearly informs the
Participant that the Participant has a right to a period of at
least 30 days after receiving the notice to consider the decision
of whether or not to elect a distribution (and, if applicable, a
particular distribution option), and
15.2.5.2 the Participant, after receiving the notice,
affirmatively elects a distribution.
15.2.6 If, upon the date that payments are to commence under
this Section , the amount of such payment cannot be ascertained, a
payment retroactive to such date may be made no later than sixty (60)
days after the end of the Plan Year during which such date occurs.
15.3 LIMITATIONS ON TIMING. Notwithstanding any other provision of
the Plan to the contrary, distributions must occur at least as rapidly as
required under this Section .
15.3.1 A Participant's entire interest in the Plan shall be
distributed to him no later than the Required Beginning Date.
"Required Beginning Date" shall mean April 1 of the calendar year
following the calendar year in which the Participant attains age
seventy and one-half (70- 1/2 ).
15.3.2 In the event of the death of a Participant prior to
distribution of his benefits under the Plan, distribution of such
benefits to a Beneficiary shall be made within five (5) years after
the death of such Participant.
15.4 PAYMENTS ON PERSONAL RECEIPT EXCEPT IN CASE OF LEGAL DISABILITY.
All payments to any Participant or his Beneficiary, from the Trust Fund,
shall be made to the recipient entitled thereto in person or upon his
personal receipt, in a form satisfactory to the Administrative Committee,
except when the recipient entitled thereto shall be under a legal
disability, or, in the sole judgment of the Administrative Committee,
shall otherwise be unable to apply such payments in furtherance of his own
interests and advantage. The Administrative Committee may, in such event,
in its sole discretion, direct all or any portion of such payments to be
made in any one or more of the following ways: (i) directly to such
person; (ii) to the guardian of his person or of his estate, appointed by
any court of competent jurisdiction; (iii) to his spouse or to any other
person, to be expended for his benefit; (iv) to a custodian under any
applicable Uniform Gifts to Minors Act; or (v) by the Administrative
Committee itself directing the expenditure of any payments so made. The
decision of the Administrative Committee, in each case, will be final,
binding and conclusive upon all persons ever interested hereunder, and,
except in the case of (v) above, the Administrative Committee shall not be
obliged to see to the proper application or expenditure of any payments so
made. Any payment made pursuant to the power herein conferred upon the
Administrative Committee shall operate as a complete discharge of all
obligations of the Trustee and the Administrative Committee, to the extent
of the amounts so paid.
15.5 BENEFITS PAYABLE IN CASH. All disbursements from the Trust Fund
shall be made in cash, and no Participant may elect to receive an in kind
distribution.
15.6 DISTRIBUTION ACCOUNTS. If the payment of a Participant's
Accounts is to be deferred pursuant to Section hereof, the balance in the
Participant's Accounts shall remain invested in accordance with the
Participant's previous directions under Section or in accordance with
Section , whichever is applicable, and such Participant may continue to
direct the investment of his Accounts in the manner and to the extent
permitted in Section as if the Participant were still employed by the
Participating Company or an Affiliated Company.
15.7 METHOD OF DISTRIBUTION FOR PRIOR PLAN ACCOUNTS. Notwithstanding
Section , the distribution of a Participant's Prior Plan Account
(hereafter, in this Section only, the "PPA Distribution") shall be made
in accordance with the provisions of this Section .
15.7.1 If the Participant's PPA Distribution is $3,500 or
less, or if the Participant shall file a timely Qualified Waiver, then
the distribution of the Participant's PPA Distribution shall be made
in a lump sum in cash as provided in Subsection above.
15.7.2 Unless a Participant's PPA Distribution is distributed
in a lump sum cash payment pursuant to Subsection above, his or her
PPA Distribution will be used to purchase from an insurance company a
Qualified Joint and Survivor Annuity, which Annuity will be
distributed to the Participant in lieu of a lump sum cash payment or
installments, at the same time as the distribution under Section .
For purposes of this Section , the following definitions shall apply:
15.7.2.1 A "Qualified Waiver" shall mean a Participant's
written waiver of his right to receive the PPA Distribution in
the form of a Qualified Joint and Survivor Annuity. To be
effective, the written waiver must be received by the
Administrator within ninety (90) days prior to the scheduled
purchase of a Qualified Joint & Survivor Annuity, and must be
consented to in writing by the Participant's spouse ("Spousal
Consent"), and the Spousal Consent must be witnessed by a Notary
Public or by the Administrator. Notwithstanding the Spousal
Consent requirement, if the Participant establishes to the
satisfaction of the Administrator that such written Spousal
Consent may not be obtained because there is no spouse or because
the spouse cannot be located, or for any other reason authorized
by applicable Regulations, the Participant's written waiver will
be deemed to contain the required Spousal Consent. Any Spousal
Consent will be valid only with respect to the spouse who gives
it, or in the event of a deemed Spousal Consent, the designated
spouse. Additionally, a revocation of a previously filed
Qualified Waiver may be made by a Participant without Spousal
Consent at any time prior to the distribution of the
Participant's PPA Distribution.
15.7.2.2 A "Qualified Joint and Survivor Annuity" shall
mean an annuity which provides a monthly payment for the lifetime
of the Participant and, if the Participant has a spouse on the
date payments commence, further provides, upon the Participant's
death, a monthly payment for the lifetime of such surviving
spouse which is fifty percent (50%) of the amount of the monthly
payment made during the joint lives of the Participant and such
surviving spouse.
15.7.3 With regard to the Qualified Waiver, the Plan
Administrator shall provide the Participant within a reasonable period
of time before date on which the Qualified Joint and Survivor Annuity
otherwise would be purchased, a written explanation of:
(i) The terms and conditions of Qualified Joint and
Survivor Annuity, and
(ii) The Participant's right to file the Qualified Waiver,
and
(iii) The right of the Participant's spouse, if any, to
consent to the filing of a Qualified Waiver, and
(iv) The right of the Participant to revoke such Qualified
Waiver, and the effect of such a revocation, as well as the right
to subsequently file another Qualified Waiver.
15.8 DISTRIBUTION LIMITATIONS APPLICABLE TO BEFORE-TAX DEPOSITS.
Notwithstanding any provisions to the contrary herein, no distribution
shall be made of any Before-Tax Deposits or the earnings thereon prior to
the earliest of:
15.8.1 Separation from service, death, or disability (all as
defined in Code Section 401(k) and the regulations thereunder).
15.8.2 Termination of the Plan without establishment of or
maintenance of another defined contribution plan (other than an
employee stock ownership plan as defined in Code Section 4975(e)(7)),
as provided in Treasury Regulations.
15.8.3 The disposition by a Participating Company of
substantially all of the assets used by such Participating Company in
a trade or business of such Participating Company, as provided in
Treasury Regulations.
15.8.4 The disposition by a Participating Company of its
interest in a subsidiary, as provided in Treasury Regulations.
15.8.5 The attainment of age fifty-nine and one-half (59
1/2 ) as provided in Section above or the Required Beginning Date,
as provided in Section above.
15.8.6 Financial hardship pursuant to the provisions of
Section above.
15.9 BENEFITS PAYABLE PURSUANT TO A QUALIFIED DOMESTIC RELATIONS
ORDER. Notwithstanding any other provision of the Plan to the contrary,
immediate distribution of benefits payable to an Alternate Payee pursuant
to a Qualified Domestic Relations Order shall be permitted even though the
Participant whose benefits have been assigned to the Alternate Payee would
not be entitled to receive a distribution at such time, if all of the
following requirements are met: (i) the Participant's Account is one
hundred percent (100%) vested and nonforfeitable at such time pursuant to
Section hereof, (ii) the entire amount payable to the Alternate Payee
does not exceed Three Thousand Five Hundred Dollars ($3,500), or the
Alternate Payee has requested immediate distribution in writing, (iii)
allocation pursuant to Section hereof of all amounts required to be paid
to the Alternate Payee has been completed, and (iv) the Qualified Domestic
Relations Order requires or permits immediate distribution.
In the event an Alternate Payee dies prior to distribution of the
amounts payable to the Alternate Payee pursuant to the Qualified Domestic
Relations Order, the amount payable shall be distributed as provided in
the Qualified Domestic Relations Order. If the Qualified Domestic
Relations Order does not specify how such amounts are to be distributed in
the event of the Alternate Payee's death, the Administrative Committee
shall cause such amounts to be distributed in accordance with applicable
law; without limitation, the Administrative Committee may ascertain the
requirements of applicable law by filing an interpleader or declaratory
judgment action in a court of competent jurisdiction.
15.10 DIRECT ROLLOVERS. 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 Administrative Committee, to have any portion of an
eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover. Such procedures
may limit direct rollovers to eligible rollover distributions of at least
$200 (or those reasonably expected to total at least $200 when aggregated
with other distributions during the Plan Year from this Plan). The
procedures prescribed by the Administrative Committee may include a
deadline for making such an election and may require the distributee to
furnish adequate information regarding the transferee plan. Such
procedures may also require the direct rollover of at least $500 as a
condition of permitting direct rollover of less than the total
distribution and may limit Participants to a single direct rollover.
15.10.1 DEFINITIONS.
15.10.1.1 ELIGIBLE ROLLOVER DISTRIBUTION. An eligible
rollover distribution is any distribution of all or any portion
of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period
of ten years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; and
the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
15.10.1.2 ELIGIBLE RETIREMENT PLAN. An eligible retirement
plan is an individual retirement account described in Section
408(a) of the Code, an individual retirement annuity described in
Section 408(b) of the Code, an annuity plan described in Section
403(a) of the Code, or a qualified trust described in Section
401(a) of the Code that is a defined contribution plan that
accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to a
surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
15.10.1.3 DISTRIBUTEE. A distributee includes an employee
or former employee. In addition, the employee's or former
employee's surviving spouse and the employee's or former
employee's spouse or former spouse who is the alternate payee
under a Qualified Domestic Relations Order, as defined in Section
414(p) of the Code, are distributees with regard to the interest
of the spouse of former spouse.
15.10.1.4 DIRECT ROLLOVER. A direct rollover is a payment
by the Plan to the eligible retirement plan specified by the
distributee.
SECTION 16
BENEFIT CLAIMS PROCEDURE
16.1 CLAIMS FOR BENEFITS. Any claim for benefits under the Plan
shall be made in writing to the Administrative Committee. If such claim
for benefits is wholly or partially denied, the Administrative Committee
shall, within ninety (90) days after receipt of the claim, notify the
Participant or Beneficiary of the denial of the claim. Such notice of
denial (i) shall be in writing, (ii) shall be written in a manner
calculated to be understood by the Participant or Beneficiary, and (iii)
shall contain (a) the specific reason or reasons for denial of the claim,
(b) a specific reference to the pertinent Plan provisions upon which the
denial is based, (c) a description of any additional material or
information necessary to perfect the claim, along with an explanation of
why such material or information is necessary and (d) an explanation of
the claim review procedure, in accordance with the provisions of this
Section .
16.2 REQUEST FOR REVIEW OF DENIAL. Within sixty (60) days after the
receipt by the Participant or Beneficiary of a written notice of denial of
the claim, or such later time as shall be deemed reasonable taking into
account the nature of the benefit subject to the claim and any other
attendant circumstances, if the Participant or Beneficiary does not agree
with the denial of the claim, such Participant or Beneficiary or his
authorized representative shall file a written request with the
Administrative Committee that it conduct a full and fair review of the
denial of the claim for benefits. In connection with any request for a
review of the denial of a claim for benefits, the Participant or
Beneficiary, or his authorized representative, may review pertinent
documents relating thereto and may submit issues and comments in writing
to the Administrative Committee.
16.3 DECISION ON REVIEW OF DENIAL. The Administrative Committee
shall deliver to the Participant or Beneficiary a written decision on the
claim within sixty (60) days after the receipt of the aforesaid request
for review, except that if there are special circumstances (such as the
need to hold a hearing, if necessary) which require an extension of time
for processing, the aforesaid sixty (60) day period shall be extended to
one hundred twenty (120) days. Written notice of any such extension shall
be furnished to the Participant or Beneficiary prior to the commencement
of such extension. A decision on a review of a denial of a claim for
benefits shall (i) be written in a manner calculated to be understood by
the Participant or Beneficiary, (ii) include the specific reason or
reasons for the decision, and (iii) contain a specific reference to the
pertinent Plan provisions upon which the decision is based.
SECTION 17
MISCELLANEOUS PROVISIONS
RESPECTING PARTICIPANTS
17.1 PARTICIPANTS TO FURNISH REQUIRED INFORMATION.
17.1.1 Each Participant shall furnish to the Administrative
Committee such information as the Administrative Committee considers
necessary or desirable for purposes of administering the Plan, and the
provisions of the Plan respecting any payments hereunder are
conditional upon the Participant's furnishing promptly such true, full
and complete information as the Administrative Committee may
reasonably request.
17.1.2 Each Participant shall submit proof of such
Participant's age to the Administrative Committee. The Administrative
Committee shall, if such proof of age is not submitted as required,
use as conclusive evidence thereof, such information as is deemed by
it to be reliable, regardless of the source of such information. Any
adjustment required by reason of lack of proof or the misstatement of
the age of persons entitled to benefits hereunder, by the Participant
or otherwise, shall be in such manner as the Administrative Committee
deems equitable.
17.1.3 Any notice or information which according to the terms
of the Plan or the rules of the Administrative Committee must be filed
with the Administrative Committee, shall be deemed so filed if
addressed and either delivered in person or mailed, postage fully
prepaid, to the Administrative Committee. Whenever a provision herein
requires that a Participant (or the Participant's Beneficiary) give
notice to the Administrative Committee within a specified number of
days or by a certain date, and the last day of such period, or such
date, falls on a Saturday, Sunday, or company holiday, the Participant
(or the Participant's Beneficiary) will be deemed in compliance with
such provision if notice is delivered in person to the Administrative
Committee or is mailed, properly addressed, postage prepaid, and
postmarked on or before the business day next following such Saturday,
Sunday or company holiday. The Administrative Committee may, in its
sole discretion, modify or waive any required notice; provided,
however, that such modification or waiver must be administratively
feasible, must be in the best interest of the Participant, and must be
made on the basis of rules of the Administrative Committee which are
applied uniformly to all Participants.
17.2 PARTICIPANTS' RIGHTS IN TRUST FUND. No Participant or other
person shall have any right, title or interest in, to or under the Trust
Fund, or any part of the assets thereof, except and to the extent
expressly provided in the Plan.
17.3 INALIENABILITY OF BENEFITS.
17.3.1 RESTRICTIONS ON ASSIGNMENT. The benefits provided
hereunder are intended for the personal security of persons entitled
to payment under the Plan, and are not subject in any manner to the
debts or other obligations of the persons to whom they are payable.
The interest of a Participant or such Participant's Beneficiary or
Beneficiaries may not be sold, transferred, assigned or encumbered in
any manner, either voluntarily or involuntarily, and any attempt so to
anticipate, alienate, sell, transfer, assign, pledge, encumber, or
charge the same shall be null and void; neither shall the Trust Fund
nor any benefits thereunder or hereunder be liable for or subject to
the debts, contracts, liabilities, engagements or torts of any person
to whom such benefits or funds are payable, nor shall they be subject
to garnishment, attachment, or other legal or equitable process nor
shall they be an asset in bankruptcy. All of the provisions of this
Section , however, are subject to Section .
17.3.2 EXCEPTION FOR QUALIFIED DOMESTIC RELATIONS ORDER.
17.3.2.1 The prohibitions contained in Subsection hereof
shall not apply to the creation, assignment or recognition of a
right to any benefit payable with respect to a Participant
pursuant to a Qualified Domestic Relations Order.
17.3.2.2 The Plan Administrator shall establish written
procedures for the determination of the qualified status of a
domestic relations order.
17.3.2.3 Upon receiving a domestic relations order, the
Plan Administrator shall notify the Participant and Alternate
Payee named in the order, in writing, of the receipt of the order
and the Plan's procedures for determining the qualified status of
the order. Within a reasonable period of time after receiving
the domestic relations order, the Plan Administrator shall
determine the qualified status of the order and shall notify the
Participant and the Alternate Payee, in writing, of its
determination. The Plan Administrator shall provide notice under
this paragraph by mailing such notice to the individual's address
specified in the domestic relations order, or in a manner
consistent with Department of Labor regulations.
If any portion of the Participant's Account is payable during the
period the Plan Administrator is making its determination of the
qualified status of the domestic relations order, the Administrative
Committee shall direct the Trustee to segregate the amounts payable in
a separate account and to invest the segregated account solely in
fixed income investments. If the Plan Administrator determines the
order is a Qualified Domestic Relations Order within eighteen (18)
months of the time for commencement of distribution under the order,
the Administrative Committee shall direct the Trustee to distribute
the segregated account in accordance with the order. If the Plan
Administrator does not make its determination of the qualified status
of the order within eighteen (18) months after the time for
commencement of distribution under the order, the Administrative
Committee shall direct the Trustee to distribute the segregated
account in the manner the Plan would distribute if the order did not
exist and shall apply the order prospectively if the Plan
Administrator later determines the order is a Qualified Domestic
Relations Order.
To the extent it is not inconsistent with the provisions of the
Qualified Domestic Relations Order, the Trustee shall segregate the
amount subject to the Qualified Domestic Relations Order in a separate
account and invest the account in federally insured, interest-bearing
savings account(s) or time deposit(s) (or a combination of both),
direct obligations of the United States, or any other investment
providing for guarantee of principal and a fixed rate of return. Any
segregated account shall remain a part of the Trust, but it alone
shall share in any income it earns, and it alone shall bear any
expense or loss it incurs.
The Trustee shall make any payments or distributions required
under this Subsection by separate benefit checks or other separate
distribution to the Alternate Payee(s).
17.3.2.4 "Qualified Domestic Relations Order" shall mean an
order which:
17.3.2.4.1 Relates to the provision of child support,
alimony payments, or marital property rights to a spouse,
child, or other dependent of a Participant;
17.3.2.4.2 Is made pursuant to a state domestic
relations law (including a community property law);
17.3.2.4.3 Creates or recognizes the existence of an
Alternate Payee's right to, or assigns to an Alternate Payee
the right to, receive all or a portion of the benefits
payable with respect to a Participant under the Plan; and
17.3.2.4.4 Is determined by the Plan Administrator to
meet all applicable requirements pursuant to the procedure
established by the Committee for determining whether an
order is a Qualified Domestic Relations Order.
A Qualified Domestic Relations Order includes a
domestic relations order issued before January 1, 1985 that
is treated by the Plan Administrator as a Qualified Domestic
Relations Order pursuant to the Retirement Equity Act of
1984.
17.3.2.5 "Alternate Payee" shall mean an individual
entitled to benefits under the Plan pursuant to a Qualified
Domestic Relations Order.
17.4 ADDRESS FOR MAILING OF BENEFITS.
17.4.1 Each Participant and each other person entitled to
benefits hereunder shall file with the Administrative Committee from
time to time in writing such Participant's post office address and
each change of address. Any check representing payment hereunder and
any communication addressed to a Participant, an Employee or
Beneficiary, at such person's last address filed with the
Administrative Committee, or if no such address has been filed, then
at such person's last address as indicated on the records of a
Participating Company, shall be deemed to have been delivered to such
person on the date on which such check or communication is deposited,
postage prepaid, in the United States mail.
17.4.2 If the Administrative Committee is in doubt as to
whether payments are being received by the person entitled thereto, it
shall, by registered mail addressed to the person concerned, at his
address last known to the Administrative Committee, notify such person
that all unmailed and future payments shall be withheld until he
provides the Administrative Committee with evidence of his continued
life and his proper mailing address.
17.5 UNCLAIMED ACCOUNT PROCEDURE. Neither the Trustee nor the
Administrative Committee shall be obliged to search for, or ascertain the
whereabouts of any Participant, Beneficiary or Alternate Payee. The
Administrative Committee, by certified or registered mail addressed to
such Participant's, Beneficiary's or Alternate Payee's last known address,
shall notify the Participant, Beneficiary or Alternate Payee that such
Participant, Beneficiary or Alternate Payee is entitled to a distribution
under this Plan, and the notice shall quote the provisions of this Section
. If any distribution or payment which is not claimed by the person
entitled thereto or before the termination or discontinuance of the Plan,
whichever occurs first, the Administrative Committee shall treat the
Participant's, Beneficiary's or Alternate Payee's unclaimed benefit as
forfeited. Such forfeited amounts shall be added to forfeitures and used
as herein provided.
If a Participant, Beneficiary or Alternate Payee who has incurred a
forfeiture of his benefits under the provisions of the first paragraph of
this Section makes a claim for such forfeited benefit, at any time prior
to termination or discontinuance of the Plan, the Administrative Committee
shall restore the Participant's, Beneficiary's or Alternate Payee's
forfeited benefit to the same dollar amount as the dollar amount of the
benefit forfeited, unadjusted for any gains or losses occurring subsequent
to the date of the forfeiture. The Administrative Committee shall make
the restoration, during the Plan Year in which the Participant,
Beneficiary or Alternate Payee makes the claim, first from the amount, if
any, of Participant forfeitures the Administrative Committee otherwise
would use for the Plan Year, and then from the amount, or additional
amount, the Participating Company for whom such Participant was employed
shall contribute to the Plan to enable the Administrative Committee to
make the required restoration. The Administrative Committee shall direct
the Trustee to distribute the Participant's, Beneficiary's or Alternate
Payee's restored benefit to him in a lump sum not later than sixty (60)
days after the close of the Plan Year in which the Administrative
Committee restores the forfeited benefit.
SECTION 18
LOANS TO PARTICIPANTS,
BENEFICIARIES AND ALTERNATE PAYEES
Upon the written application of any Participant (and any Former
Participant or Beneficiary who is a party-in-interest with respect to the
Plan and who has an undistributed Account under the Plan) made to the
Administrative Committee on such form and accompanied by such additional
documentation and information as the Administrative Committee shall
require, the Administrative Committee shall, if the Administrative
Committee determines the loan would comply with all of the loan
requirements, make a loan to such individual (the "Borrower"); provided,
however, that the amount of any such loan to a Borrower when added to the
outstanding balance of all other such loans, if any, made to such Borrower
hereunder, shall not exceed the lesser of (a) Fifty Thousand Dollars
($50,000) reduced by the excess, if any, of the highest outstanding
balance of loans from the Plan during the one-year period ending on the
day before the date on which the loan is made, over the outstanding
balance of loans from the Plan on the date on which the loan is made; or
(b) fifty percent (50%) of the vested amounts in all of the Borrower's
Accounts valued as of the Valuation Date coincident with or next preceding
the date the loan is approved. The Administrative Committee may establish
uniform and nondiscriminatory rules which further limit the amount and the
Accounts from which Participants, Beneficiaries and Alternate Payees may
borrow from the Trust so long as such rules are in writing and are
distributed to Participants, Beneficiaries and Alternate Payees. Loans
shall be available to all Participants, Beneficiaries and Alternate Payees
on a reasonably equivalent basis, and shall not be made available to
Highly Compensated Employees, as a percentage of their Accounts greater
than the percentage of the Accounts made available to other Participants,
Beneficiaries or Alternate Payees. All such loans shall be subject to the
following terms and conditions:
(a) Interest will be based on a reasonable rate of interest
which shall be commensurate with the interest rates charged by persons
in the business of lending money for loans of a similar nature. This
reasonable rate of interest shall be determined by the Administrative
Committee, in its sole discretion, through reasonable investigation of
the interest rates charged by lenders in Fort Smith, Arkansas for
loans of a similar nature at or near the time that the Plan loan is
granted. Administrative fees related to a loan may be charged against
the loan proceeds and/or the Borrower's Account in accordance with
rules prescribed by the Administrative Committee.
(b) Any loan made to a Borrower shall be considered a directed
investment of such Borrower. The Administrative Committee shall,
subject to any terms and conditions imposed by the Trustee, establish
uniform policies and procedures regarding the manner in which the
amount of any loan shall be obtained from the Investment Funds
referred to in Section hereof to which the Borrower has directed the
investment of the amounts credited to his Accounts. Repayments of
principal amounts and interest paid on such loan shall be credited to
the Borrower's Account from which the loan was made on the basis of
the amount of the loan from each such account. Repayments of
principal amounts and interest payments on any loan shall be invested
among the Investment Funds in accordance with the Borrower's current
investment direction for his Accounts pursuant to Section .
(c) Loans shall be evidenced by promissory notes in the form
approved by the Administrative Committee, which shall specify the time
and manner of repayment as determined by the Administrative Committee
in accordance with uniform and nondiscriminatory rules.
Notwithstanding the foregoing provisions, it is generally intended
that repayment of a loan by an Employee will be made by payroll
deduction. All loans shall be amortized in level payments made no
less frequently than quarterly over the term of the loan. In no event
shall any loan be repayable over a period in excess of five (5) years
from the date such loan is made, unless such loan is used to acquire
any dwelling unit which within a reasonable time is to be used
(determined at the time the loan is made) as the principal residence
of the Borrower, in which case, the loan shall be repayable over a
reasonable period as determined in accordance with uniform rules
established by the Administrative Committee.
(d) Every loan shall be secured by fifty percent (50%) of the
amount in the Borrower's Accounts under the Plan, and such other
security, if any, as the Administrative Committee shall deem necessary
to ensure that the loan is adequately secured.
(e) Loan funds shall be disbursed as soon as practicable
following receipt by the Administrative Committee of the loan
application.
(f) An "Event of Default" shall be deemed to have occurred if
two (2) consecutive loan repayments are not made on or before the due
date of the second (2nd) of such payments. When an Event of Default
occurs, the Administrative Committee shall offset, to the extent
legally permissible, the unpaid amount (including interest) against
the Borrower's Accounts to the extent such Accounts are security for
the loan. To the extent not so offset, the unpaid balance will bear
interest at the maximum legal rate until offset.
(g) No loans shall be made for less than One Thousand Dollars
($1,000).
(h) No Borrower shall have more than one loan outstanding at any
time. If a Plan loan is prepaid, the Borrower may not take another
loan until after the expiration of at least sixty (60) days from the
date such prepayment occurred.
(i) The Administrative Committee shall establish such additional
loan policies and procedures as are necessary to provide uniform and
nondiscriminatory rules governing the making of loans to Participants,
Beneficiaries and Alternate Payees.
(j) Loans shall not be made to the extent they would violate
Section 4975 of the Code or Section 406 of ERISA and the regulations
thereunder, to the extent they would be taxed as distributions to
Participants under Section 72(p) of the Code, or to the extent they
would violate any applicable law, and all provisions hereof shall be
interpreted accordingly.
SECTION 19
ADOPTION OF PLAN BY AFFILIATED COMPANY
Any Affiliated Company, whether or not presently existing, may, with
the approval of the Board of Directors of the Sponsoring Company, adopt
this Plan pursuant to appropriate written resolutions of the Board of
Directors of such Affiliated Company and, if appropriate, by executing
such documents, if any, with the Trustee as may be necessary to make such
Affiliated Company a party to the Trust Agreement as a Participating
Company. Any Affiliated Company which adopts the Plan is thereafter a
Participating Company with respect to its Employees for purposes of the
Plan.
SECTION 20
WITHDRAWAL FROM PLAN
20.1 NOTICE OF WITHDRAWAL. Any Participating Company may, with the
approval of the Board of Directors of the Sponsoring Company, as of any
Valuation Date, withdraw from the Plan upon giving the Administrative
Committee and the Trustee at least thirty (30) days' notice in writing of
its intention to withdraw.
20.2 SEGREGATION OF TRUST ASSETS UPON WITHDRAWAL. Upon the
withdrawal of a Participating Company pursuant to Section , the Trustee
shall segregate the share of the assets in the Trust Fund, the value of
which shall equal the total credited to the Accounts of Participants of
the withdrawing Participating Company. The determination of which assets
are to be so segregated shall be made by the Trustee, in its sole
discretion, after taking into account the investment selections provided
for in Section hereof.
20.3 EXCLUSIVE BENEFIT OF PARTICIPANTS. Neither the segregation and
any transfer of the Trust assets upon the withdrawal of a Participating
Company nor the execution of a new agreement and/or declaration of trust
by such withdrawing Participating Company shall operate to permit any part
of the Trust Fund to be used for or diverted to purposes other than for
the exclusive benefit of the Participants.
20.4 APPLICABILITY OF WITHDRAWAL PROVISIONS. The withdrawal
provisions contained in this Section shall be applicable only if the
withdrawing Participating Company continues to cover its Participants and
eligible Employees in another profit-sharing plan and trust qualified
under Sections 401 and 501 of the Code. Otherwise, the termination
provisions of the Plan and Trust shall apply.
SECTION 21
AMENDMENT OF THE PLAN
The Board of Directors of the Sponsoring Company reserves the right to
amend the Plan with respect to all Participating Companies at any time and
from time to time. In addition, the Board of Directors of each
Participating Company may amend the Plan with respect to such
Participating Company at any time, and from time to time, pursuant to
written resolutions adopted by such Board of Directors, provided the
Sponsoring Company approves such amendment. Unless otherwise permitted by
law, no amendment shall permit any part of the Trust Fund to revert to or
be recoverable by a Participating Company or be used for or diverted to
purposes other than the exclusive benefit of the Participants or their
Beneficiaries, or deprive any Participant of any interest he might have in
the Trust Fund at the time of the amendment to the extent that such
interest would be available to the Participant under Section hereof were
he to voluntarily resign as of the effective date of the amendment.
(a) Under no condition, shall such amendment, amendments, or
restatements increase the duties or responsibilities, or decrease the
compensation, privileges, and immunities of the Trustee without the
Trustee's written consent.
(b) Under no condition, shall such amendment change the vesting
schedule to one which would result in the nonforfeitable percentage of
the accrued benefit derived from Company Matching Deposits (determined
as of the later of the date of the adoption of the amendment or of the
effective date of the amendment) of any Participant being less than
such nonforfeitable percentage computed under the Plan without regard
to such amendment; no amendment shall change the vesting schedule
unless each Participant with three (3) or more Vesting Years of
Service, is permitted to elect, within the election period described
below, to have his nonforfeitable percentage computed under the Plan
without regard to the amendment. The election period described herein
shall begin no later than the date upon which the amendment is adopted
and shall end no later than the latest of the following dates: (i) the
date which is sixty (60) days after the day the amendment is adopted,
(ii) the date which is sixty (60) days after the day the amendment
becomes effective, or (iii) the date which is sixty (60) days after
the day the Participant is issued a written notice of the amendment by
the Sponsoring Company.
(c) Subject to the above stated limitations and the requirement
that no amendment shall eliminate, except with respect to any future
contributions or future accrual of benefits and except as otherwise
permitted by Treasury regulations or rulings, any nondiscretionary
optional form of payment (as provided in Treasury Regulation Section
1.411(d)-4 and Code Section 411(d)(6)) with respect to any Participant
who is a Participant immediately prior to the amendment, the
Sponsoring Company shall have the power to amend the Plan and Trust
Agreement, retroactively or otherwise, in any manner in which it deems
desirable, including, but not by way of limitation, the power to
change any provisions relating to the administration of the Plan and
Trust Fund, and to change any provisions relating to the benefits or
payment of any of the assets of the Trust Fund. Each such amendment
shall become effective when executed by the Sponsoring Company unless
a different effective date is specified in the amendment.
(d) Notwithstanding anything herein to the contrary, this Plan
may be amended at any time by the Sponsoring Company if necessary or
desirable in order to have it conform to the provisions and
requirements of the Code or any other law with respect to qualified
employees' plans and trusts, and no such amendment shall be considered
prejudicial to the rights of any Participant hereunder or of any
Beneficiary, Alternate Payee or Employee. Further, it is understood
that any provisions of this Plan as herein contained which are
contrary to the requirements of the Code for a qualified tax exempt
employees' plan and trust shall be deemed void and of no effect,
without affecting the validity of other provisions hereof.
SECTION 22
PERMANENCY OF THE PLAN
22.1 RIGHT TO TERMINATE PLAN. Each Participating Company
contemplates that the Plan shall be permanent and that it shall be able to
make contributions to the Plan. Nevertheless, in recognition of the fact
that future conditions and circumstances cannot now be entirely foreseen,
each Participating Company reserves the right to terminate (as to such
Participating Company) either the Plan or both the Plan and the Trust, and
the Sponsoring Company reserves the right to terminate the Plan and the
Trust in its entirety.
22.2 MERGER OR CONSOLIDATION OF PLAN AND TRUST. Neither the Plan nor
the Trust may be merged or consolidated with, nor may its assets or
liabilities be transferred to, any other plan or trust, unless each
Participant 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 he would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had
then terminated).
22.3 CONTINUANCE BY SUCCESSOR COMPANY. In the event of the
liquidation, dissolution, merger, consolidation or reorganization of a
Participating Company, the successor company may adopt the Plan and Trust
for the benefit of the employees of such Participating Company. If such
successor company does adopt the Plan and Trust, it shall, in all
respects, be substituted for such Participating Company under the Plan and
Trust. Any such substitution of such successor company shall constitute an
assumption of Plan liabilities by such successor company, and such
successor company shall have all of the powers, duties and
responsibilities of such Participating Company under the Plan and Trust.
If such successor company does not adopt the Plan and Trust, the Plan and
Trust shall be terminated with respect to such Participating Company in
accordance with the provisions of the Plan and Trust Agreement.
SECTION 23
DISCONTINUANCE OF DEPOSITS AND TERMINATION
23.1 DISCONTINUANCE OF DEPOSITS. Whenever a Participating Company
determines that it is impossible or inadvisable for it to make further
contributions as provided in the Plan, the Board of Directors of such
Participating Company may, without terminating the Trust, adopt an
appropriate resolution permanently discontinuing all further contributions
by such Participating Company. A certified copy of such resolution shall
be delivered to the Administrative Committee and the Trustee. Thereafter,
the Administrative Committee and the Trustee shall continue to administer
all the provisions of the Plan which are necessary and remain in force,
other than the provisions relating to contributions by such Participating
Company. However, the Trust shall remain in existence with respect to
such Participating Company and all of the provisions of the Trust
Agreement shall remain in force.
23.2 TERMINATION OF PLAN AND TRUST. If the Board of Directors of a
Participating Company determines to terminate (as to such Participating
Company) the Plan and Trust completely, they shall be terminated insofar
as they are applicable to such Participating Company as of the date
specified in certified copies of resolutions of such Board of Directors
delivered to the Administrative Committee and the Trustee. Upon such
termination of the Plan and Trust, after payment of all expenses and
proportional adjustment of Accounts of Participants employed by such
Participating Company to reflect such expenses, Trust Fund profits or
losses, and subject to the limitations contained in Section hereof,
allocations of any previously unallocated funds to the date of
termination, such Participating Company's Participants shall be entitled
to receive the amount then credited to their respective Accounts in the
Trust Fund, subject to Section above. The Administrative Committee shall
make payment to such Participants of such amount in cash or in the form of
Arkansas Best Stock, in accordance with the distribution options set forth
in Section of the Plan; provided, however, that if the Administrative
Committee determines that certain assets are not readily salable at their
fair market value or cannot be sold due to legal restrictions, the
Administrative Committee shall distribute such assets in kind.
23.3 RIGHTS TO BENEFITS UPON TERMINATION OF PLAN OR COMPLETE
DISCONTINUANCE OF DEPOSITS. Upon the termination or partial termination
of the Plan or the complete discontinuance of contributions by a
Participating Company, the rights of each of such Participating Company's
Employees who are then Participants (or, in the case of a partial
termination, who are then Participants affected by the termination) and
the rights of each other person, other than a person who has forfeited his
non-vested amounts pursuant to Section hereof prior to the effective date
of such termination (or partial termination) or complete discontinuance,
to the amounts credited to his Accounts at such time, shall be
nonforfeitable without reference to any formal action on the part of such
Participating Company, the Administrative Committee or the Trustee.
SECTION 24
STATUS OF EMPLOYMENT RELATIONS
The adoption and maintenance of the Plan and Trust shall not be deemed
to constitute a contract between a Participating Company and its Employees
or to be consideration for, or an inducement or condition of, the
employment of any person. Nothing herein contained shall be deemed (i) to
give to any Employee the right to be retained in the employ of a
Participating Company; (ii) to affect the right of a Participating Company
to discipline or discharge any Employee at any time; (iii) to give a
Participating Company the right to require any Employee to remain in its
employ; or (iv) to affect any Employee's right to terminate his employment
at any time.
SECTION 25
BENEFITS PAYABLE BY TRUST
All benefits payable under the Plan shall be paid or provided for
solely from the Trust. The Participating Company assumes no liability or
responsibility therefor.
SECTION 26
EXCLUSIVE BENEFIT OF TRUST FUND
26.1 LIMITATION ON REVERSIONS. Except as otherwise provided in
Section hereof or in this Section , the assets of the Trust Fund shall be
held for the exclusive purposes of providing benefits to Participants and
their Beneficiaries and defraying reasonable expenses of administering the
Plan and shall not inure to the benefit of any Participating Company.
26.2 UNALLOCATED AMOUNTS UPON TERMINATION OF PLAN AND TRUST. In the
event the Plan and Trust are terminated, any previously unallocated
amounts maintained in a suspense account in accordance with the provisions
of Section hereof which cannot be allocated to Participants upon the
termination of the Plan and Trust pursuant to Section hereof because of
the limitations contained in Sections through hereof, shall revert to
the Participating Company or Participating Companies employing the
Participant at the time of such termination.
26.3 MISTAKE OF FACT OR DISALLOWANCE OF DEDUCTION. If the
Administrative Committee in good faith determines that (a) a contribution
was made by reason of a mistake of fact, or (b) a contribution is
conditioned on its being deductible under Code Section 404, but the
Internal Revenue Service disallows such deduction, the amount of the
excess contribution less losses attributable thereto may, upon direction
of the Administrative Committee, be returned to the contributing
Participating Company. All payments of returned contributions under this
Section shall be made within one (1) year from the date of the payment of
such mistaken contribution or the disallowance by the Internal Revenue
Service of the deduction, whichever is applicable. The amount of the
excess contribution shall be the excess of (1) the amount contributed over
(2) the amount that would have been contributed had there not occurred a
mistake of fact or had the deduction not been disallowed. Earnings
attributable to the excess contribution shall not be returned to the
contributing Participating Company, but losses attributable thereto shall
reduce the amount of such contribution to be so returned. Furthermore, if
the withdrawal of the amount attributable to the mistaken contribution
would cause the balance of a Participant's Account to be reduced to an
amount which is less than the balance which would have been in said
Account had the mistaken amount not been contributed, then the amount to
be returned to the Participating Company under this Section will be
reduced so as to avoid any such reduction.
26.4 FAILURE OF INITIAL QUALIFICATION OF PLAN AND TRUST. The initial
establishment of the Plan and Trust by any Participating Company is
contingent upon obtaining the approval of the Internal Revenue Service.
In the event that the Internal Revenue Service fails initially to approve
the Plan and Trust as to any Participating Company, the Trustee shall,
after paying any expenses attributable to such initial establishment,
return to such Participating Company any remaining contribution made by
such Participating Company. Such remaining contribution shall be returned
as promptly as practicable, but in no event later than one (1) year after
the date of the final denial of qualification of the Plan as to such
Participating Company, including the final resolution of any appeals
before the Internal Revenue Service or the courts.
SECTION 27
APPLICABLE LAW
To the extent not preempted by ERISA, the Plan and Trust which is a
part thereof shall be construed, regulated, interpreted and administered
under and in accordance with the laws of the State of Arkansas.
SECTION 28
INTERPRETATION OF THE PLAN AND TRUST
It is the intention of the Participating Companies that the Plan, and
the Trust established by the Participating Companies to implement the
Plan, shall qualify as a profit-sharing plan and shall comply with the
provisions of Section 401(a), Section 401(k), and Section 501(a) of the
Code and the requirements of ERISA, and the corresponding provisions of
any subsequent laws, and the provisions of the Plan and Trust Agreement
shall be construed to effectuate such intention.
SECTION 29
TOP HEAVY PLAN RULES
29.1 DEFINITIONS. As used in this Section :
29.1.1 "Defined Benefit Plan" shall have the meaning set forth
in Subsection hereof.
29.1.2 "Defined Contribution Plan" shall have the meaning set
forth in Subsection hereof.
29.1.3 "Determination Date" shall mean with respect to any
plan year, the last day of the preceding plan year, except that in the
case of the first plan year of any plan, the last day of such first
plan year.
29.1.4 "Employer" shall mean the Participating Company and any
Affiliated Companies.
29.1.5 "Key Employee" shall mean any person employed or
formerly employed by any Employer (and the beneficiaries of any such
person) who is, at any time during the plan year, or who was, during
any one or more of the four preceding plan years, any one or more of
the following:
29.1.5.1 An officer of an Employer having Limitation Year
Compensation for the applicable Plan Year greater than fifty
percent (50%) of the maximum dollar limitation under Code Section
415(b)(1)(A) (as in effect for the calendar year in which the
Determination Date for such Plan Year falls).
29.1.5.2 One of the ten persons employed by an Employer
having Limitation Year Compensation for the applicable plan year
greater than the maximum dollar limitation under Section
415(c)(1)(A) of the Code as in effect for the calendar year in
which the Determination Date for such plan year falls, and owning
(or considered as owning within the meaning of Section 318 of the
Code) both more than one-half of one percent ( 1/2 of 1%)
interest and the largest interests in the Employer. For purposes
of this Subsection , (i) a person who has some ownership interest
is considered to be one of the top ten owners unless at least ten
other persons own a larger interest than that person, and (ii) if
two or more have the same ownership interest in the Employer, the
person having greater annual Limitation Year Compensation from
all Employers shall be treated as having the larger interest.
29.1.5.3 Any person owning (or considered as owning within
the meaning of Section 318 of the Code) more than five percent
(5%) of the outstanding stock of an Employer or stock possessing
more than five percent (5%) of the total combined voting power of
such stock or more than five percent (5%) of the capital or
profits interest of an Employer which is not a corporation.
29.1.5.4 A person who would be described in Subsection
above if "one percent (1%)" were substituted for "five percent
(5%)" each place it appears in said Subsection , and whose
aggregate annual Limitation Year Compensation from all Employers
is more than One Hundred Fifty Thousand Dollars ($150,000).
29.1.5.5 Notwithstanding any other provision in this Plan
to the contrary, for purposes of determining ownership under this
Subsection , the rules of Sections 414(b), (c) and (m) of the
Code shall not apply in defining who is an Employer.
The determination of who is a Key Employee hereunder shall be
made in accordance with the provisions of Section 416(I)(1) of the
Code and the regulations thereunder.
29.1.6 "Key Employee Participant" shall mean a Participant in
this Plan who is a Key Employee.
29.1.7 "Limitation Year Compensation' shall have the meaning
set forth in Subsection hereof, except that if the Limitation Year
and the plan year under the applicable plan are not the same, then for
purposes of this Section , "plan year" shall be substituted for
"Limitation Year" every place it occurs in said Subsection .
29.1.8 "Permissive Aggregation Group" shall mean the Required
Aggregation Group, plus any other plan or plans of any Employer
selected by the Sponsoring Company, provided that such selected plans,
when considered as a group with the Required Aggregation Group, would
continue to satisfy the requirements of Sections 401(a)(4) and 410 of
the Code.
29.1.9 "Required Aggregation Group" shall mean the group of
plans consisting of (i) all tax qualified plans maintained by the
Employers in which at least one Key Employee participates, and (ii)
any other tax qualified plan maintained by the Employers which enables
a plan described in clause (i) above to meet the requirements of
Sections 401(a)(4) or 410 of the Code.
29.1.10 "Valuation Date" shall mean (i) in the case of a
Defined Contribution Plan, the last day of the plan year for the
appropriate plan, and (ii) in the case of a Defined Benefit Plan, the
date used for computing plan costs for minimum funding, regardless of
whether a valuation is performed that year.
29.1.11 All of the definitions set forth in Section hereof and
not set forth herein shall have the same meaning in this Section.
29.2 DETERMINATION OF TOP HEAVINESS.
29.2.1 This Plan shall be a "Top Heavy Plan" with respect to
any Plan Year if, as of the Determination Date for said Plan Year, any
of the following conditions exists:
29.2.1.1 The Top Heavy Ratio for this Plan exceeds sixty
percent (60%) and this Plan is not part of a Required Aggregation
Group or a Permissive Aggregation Group.
29.2.1.2 This Plan is 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 sixty percent
(60%).
29.2.1.3 This Plan is part of a Required Aggregation Group
and part of a Permissive Aggregation Group, and the Top Heavy
Ratio for the Permissive Aggregation Group exceeds sixty percent
(60%).
29.2.2 This Plan shall be a "Super Top Heavy Plan" if it would
be a Top Heavy Plan under the provisions of Subsection above if
"ninety percent (90%)" were substituted for "sixty percent (60%)"
everywhere sixty percent (60%) appears in said Subsection .
29.2.3 The "Top Heavy Ratio" referred to in Subsection above
shall be determined as follows:
29.2.3.1 If the Employers maintain or have maintained one
or more Defined Contribution Plans but have never maintained a
Defined Benefit Plan which has covered or could cover a
Participant in this Plan, the Top Heavy Ratio is a fraction, the
numerator of which is the sum of the account balances under the
Defined Contribution Plans for all Key Employees as of the
Determination Date (including any part of any such account
balance distributed in the five (5) year period ending on the
Determination Date), and the denominator of which is the sum of
all account balances under the Defined Contribution Plans for all
participants as of the Determination Date (including any part of
any such account balance distributed in the five (5) year period
ending on the Determination Date). Both the numerator and the
denominator of the Top Heavy Ratio shall be adjusted to reflect
any contribution which is due but unpaid as of the appropriate
Determination Date. In determining the account balances which
have been distributed in the five (5) year period ending on the
Determination Date, distributions under a terminated plan shall
be included, provided such terminated plan, if it had not been
terminated, would have been included in a Required Aggregation
Group.
29.2.3.2 If the Employers maintain one or more Defined
Contribution Plans and maintain or have maintained one or more
Defined Benefit Plans which have covered or could cover a
Participant in this Plan, the Top Heavy Ratio is a fraction, the
numerator of which is the sum of account balances under the
Defined Contribution Plans for all Key Employees and the present
value of accrued benefits under the Defined Benefit Plans for all
Key Employees, both calculated as of the Determination Date, and
the denominator of which is the sum of the account balances under
the Defined Contribution Plans for all participants and the
present value of accrued benefits under the Defined Benefit Plans
for all participants, both calculated as of the Determination
Date. Both the numerator and denominator of the Top Heavy Ratio
are adjusted for any distribution of an account balance or an
accrued benefit made in the five (5) year period ending on the
appropriate Determination Date and any contribution due but
unpaid as of the appropriate Determination Date. In determining
the account balances or accrued benefits which have been
distributed in the five (5) year period ending on the
Determination Date, distributions under a terminated plan shall
be included, provided such terminated plan, if it had not been
terminated, would have been included in a Required Aggregation
Group.
29.2.3.3 For purposes of Subsections and above, the value
of account balances and the present value of accrued benefits
shall be determined as of the most recent Valuation Date that
falls within or ends with the twelve (12) month period ending on
the Determination Date. The present value of accrued benefits
under Defined Benefit Plans shall be determined under the
actuarial assumptions set forth in each such plan as of said
Valuation Date as if the person voluntarily terminated service as
of such Valuation Date. If any Participant was a Key Employee as
set forth in Subsection above for any prior plan year, but such
Participant ceases to be a Key Employee for any plan year, such
Participant's account balances and accrued benefits shall not be
taken into account for purposes of determining whether this Plan
is a Top Heavy Plan or a Super Top Heavy Plan as of the
Determination Date of said plan year. Accounts and accrued
benefits shall be calculated to include all amounts attributable
to both Employer contributions and contributions by persons
employed by the Employer, but shall exclude amounts attributable
to voluntary deductible contributions by said persons. The
calculation of the Top Heavy Ratios, and the extent to which
distributions, rollovers and transfers are taken into account
shall be made in accordance with Section 416 of the Code and the
regulations thereunder. When aggregating plans for purposes of
an Aggregation Group, the value of account balances and accrued
benefits will be calculated with reference to the Determination
Dates that fall within the same calendar year. Notwithstanding
the provisions of Subsections and above, in determining the
fractions referred to therein, there shall not be taken into
account the accrued benefits or account balances of any person
who has not received any Limitation Year Compensation from any
Employer maintaining any Defined Contribution Plan or Defined
Benefit Plan referred to in such Subsections at any time during
the five (5) year period ending on the Determination Date.
29.3 MINIMUM REQUIREMENTS. Notwithstanding any other provision of
this Plan to the contrary, if the Plan is a Top Heavy Plan for any Plan
Year, then the following provisions shall apply:
29.3.1 MINIMUM ALLOCATION OF PARTICIPATING COMPANY DEPOSITS.
Except as otherwise provided in this Section , for any Plan Year in
which the Plan is a Top Heavy Plan, the Company Matching Deposits
allocated on behalf of each Participant who is not a Key Employee
Participant shall not be less than the lesser of (i) three percent
(3%) of such Participant's Limitation Year Compensation, or (ii) the
largest percentage of the sum of (a) the Company Matching Deposits
allocated on behalf of any Key Employee Participant for that Plan
Year, and (b) such Key Employee Participant's Basic and Supplemental
Before-Tax Deposits for that Plan Year; provided, however, that the
provisions of clause (ii) hereof shall not apply to any plan included
in a Required Aggregation Group if such plan enables a Defined Benefit
Plan included in such Required Aggregation Group to meet the
requirements of Section 401(a)(4) or Section 410 of the Code. The
minimum allocation provided for herein shall be determined without
taking into account contributions or benefits under Chapter 21 of the
Code (relating to the Federal Insurance Contributions Act), Title II
of the Social Security Act, or any other federal or state law, and
shall be made without regard to any contrary provisions of the Plan
regarding the allocation of Participating Company Deposits to affected
Participants which might otherwise result in any such Participant
being entitled to no allocation or a lesser allocation due to the
Participant's failure to complete one thousand (1,000) Hours of
Service (or the equivalent), the Participant's failure to make
mandatory employee contributions, or, in the case of a cash or
deferred arrangement, elective contributions, or the Participant's
failure to earn a stated amount of Compensation; provided however,
that such minimum allocation shall not be required to be made on
behalf of any Participant who is not actively employed by a
Participating Company on the last day of the applicable Plan Year.
For purposes of this Subsection , all Defined Contribution Plans
required to be included in an Aggregation Group shall be treated as
one plan.
29.3.2 VESTING. Any Participant who is credited with an Hour
of Service in the first Plan Year in which the Plan is a Top Heavy
Plan, or in any subsequent Plan Year after such first Plan Year
(whether or not the Plan is a Top Heavy Plan in such subsequent Plan
Year) shall have his percentage of vested benefits owing upon a
Termination of Employment determined pursuant to the following
schedule, in lieu of the Schedule set forth in Section hereof:
VESTING YEARS OF SERVICE PERCENTAGE
Less than 3 years 0%
3 years or more 100%
29.4 MINIMUM BENEFITS FOR EMPLOYERS MAINTAINING DEFINED BENEFIT
PLANS. If any Participant other than a Key Employee Participant is also a
participant under a Defined Benefit Plan maintained by an Employer which
is also a Top Heavy Plan, then Subsection shall not apply, and such
Participant shall receive an allocation of Company Matching Deposits in an
amount which, when added to such Participant's Basic and Supplemental
Before-Tax Deposits, is no less than five percent (5%) of such
Participant's Compensation under the Plan for the applicable Plan Year.
Such allocation shall be made without regard to the amount allocated under
the Plan on behalf of any Key Employee Participant for such Plan Year.
For purposes of this Section , all Defined Contribution Plans required to
be included in an Aggregation Group shall be treated as one plan.
29.5 SUPER TOP HEAVY PLANS. If in any Plan Year in which the Plan is
a Top Heavy Plan, (i) it is also a Super Top Heavy Plan, or (ii) it does
not provide minimum benefits under Subsection hereof after substituting
"four percent (4%)" for "three percent (3%)" contained in clause (i) of
the first sentence of said Subsection, or (iii) if Section hereof
applies, it does not provide minimum benefits under said Section after
substituting "seven and one-half percent (7- 1/2 %)" for "five percent
(5%)" contained in the first sentence of said Section, then, in any such
event, for purposes of the definitions set forth in Subsections and
hereof, the dollar limitations contained in Sections 415(e)(2)(B) and
415(e)(3)(B) of the Code shall be multiplied by 1.0 rather than 1.25.
Notwithstanding the foregoing provisions of this Section , if the
application of said provisions would cause any individual to exceed the
combined limits of Section hereof, if applicable, then the requirements
of this Section shall be suspended as to such individual until such time
as he no longer exceeds the limitations of said Section as modified by
this Section , and during the period of such suspension, said individual
shall receive no allocation of contributions which would be included in
such individual's Annual Additions (as defined in Code Section 415(c))
under this Plan or any other Defined Contribution Plan maintained by an
Employer, and there shall be no accruals of benefits for such individual
under any Defined Benefit Plan maintained by an Employer.
SECTION 30
EFFECTIVE DATE
Upon the execution hereof by the Company, the Plan shall be amended
and restated in its entirety as of October 1, 1995, except that the
provisions of Sections and shall be effective as of May 1, 1995; and
provided, further, that while all such amendments have been incorporated
in this restatement of the Plan, despite their physical omission from this
document, each provision which was in effect on April 30, 1995 or amended
by any amendment or restatement which adopted and effective before the
date of this restatement, shall apply to the same extent as though it were
physically included in this document until the effective date of its
amendment, and all other provisions of the Plan shall be construed so as
to harmonize with such pre-amendment provision until such date of
amendment.
IN WITNESS WHEREOF, INTEGRATED DISTRIBUTION, INC. has caused this Plan
to be executed and attested by the officer hereunto duly authorized, this
______ day of ______________________, 1995, effective as of October 1,
1995.
INTEGRATED DISTRIBUTION, INC.
By:
Title:
ATTEST:
By:
Title:
DII0CE3F 25879-6
Trust Agreement
Between
Arkansas Best Corporation
And
Fidelity Management Trust Company
THE ARKANSAS BEST CORPORATION AND AFFILIATES
EMPLOYEES' INVESTMENT TRUST NO. 1
Dated as of January 1, 1990
DII0CD52 25879-1
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
1. Trust ................................................... 2
2. Exclusive Benefit and Reversion of Sponsor Contributions 2
3. Disbursements ........................................... 3
4. Investment of Trust ..................................... 3
5. Recordkeeping to Be Performed ........................... 8
6. Compensation and Expenses ............................... 10
7. Directions and Indemnification .......................... 11
8. Resignation or Removal of Trustee ....................... 12
9. Successor Trustee ....................................... 12
10. Additional Trustees ..................................... 13
11. Participation and Withdrawal ............................ 14
12. Termination ............................................. 17
13. Resignation, Removal, and Termination Notices ........... 17
14. Duration ................................................ 18
15. Amendment or Modification .............................. 18
16. General ................................................. 18
17. Governing Law ........................................... 19
DII0CD52 25879-1
<PAGE>
TRUST AGREEMENT, dated as of the 1st day of January, 1990, between
ARKANSAS BEST CORPORATION, a Delaware corporation, having an office at
1000 S. 21st Street, Fort Smith, Arkansas 72901 (the "Sponsor"), and
FIDELITY MANAGEMENT TRUST COMPANY, a Massachusetts trust company, having
an office at 82 Devonshire Street, Boston, Massachusetts 02109 (the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Sponsor wishes to establish a trust to hold and invest
certain plan assets under the Plans specified in Schedule I (collectively
the "Plans" or, individually, "Plan") for the exclusive benefit of
participants in the Plans and their beneficiaries; and
WHEREAS, the Administrative Committee (the "Named Fiduciary") is a
named fiduciary of the Plans (within the meaning of section 402(a) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"));
and
WHEREAS, the Trustee is willing to hold and invest the aforesaid plan
assets in trust among several investment options selected by the Named
Fiduciary; and
WHEREAS, the Sponsor wishes to have the Trustee perform certain
ministerial recordkeeping functions under the Plans; and
WHEREAS, the Administrative Committee (the "Administrator") is the
administrator of the Plans (within the meaning of section 3(16)(A) of
ERISA); and
WHEREAS, the Trustee is willing to perform recordkeeping services for
the Plans if the services are purely ministerial in nature and are
provided within a framework of plan provisions, guidelines and
interpretations conveyed in writing to the Trustee by the Administrator.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements set forth below, the Sponsor and the
Trustee agree as follows:
Section 1. TRUST. The Sponsor hereby establishes the Arkansas Best
Corporation and Affiliates Employees' Investment Trust No. 1 (the
"Trust"), with the Trustee. The Trust adopts for accounting purposes the
fiscal year beginning January 1 of each year and ending December 31 of the
same year. The Trust is part of the Plans. The purpose of the Trust is
to fund certain benefits payable to the participants and their
beneficiaries under the Plans. The Trust shall consist of an initial
contribution of money or other property acceptable to the Trustee in its
sole discretion, made by the Sponsor, or an Affiliated Company eligible
under Section 11 of this Agreement to make contributions to the Trust, or
transferred from a previous trustee under the Plans, such additional sums
of money as shall from time to time be delivered to the Trustee under the
Plans, all investments made therewith and proceeds thereof, and all
earnings and profits thereon, less the payments that are made by the
Trustee as provided herein, without distinction between principal and
income. The Trustee hereby accepts the Trust on the terms and conditions
set forth in this Agreement. In accepting this Trust, the Trustee shall
be accountable for and agrees to hold the assets received by it along with
earnings thereon, subject to the terms and conditions of this Agreement.
The Trust shall not contain any assets of the Plans held in the Arkansas
Best Stock Fund which are invested in the Arkansas Best Corporation and
Affiliates Employees' Investment Trust No. 2 and the Trustee shall have no
responsibility for such Trust.
Section 2. EXCLUSIVE BENEFIT AND REVERSION OF SPONSOR CONTRIBUTIONS.
Except as provided under applicable law, no part of the Trust may be used
for, or diverted to, purposes other than the exclusive benefit of the
participants in the Plans or their beneficiaries prior to the satisfaction
of all liabilities with respect to the participants and their
beneficiaries.
Section 3. DISBURSEMENTS.
(a) The Trustee shall make disbursements in the amounts and in the
manner that the Administrator directs from time to time in writing, and in
the case of a distribution of less than the entire account to a
participant or beneficiary, the Administrator shall direct the portion of
the account or the amount to be distributed. The Trustee shall have no
responsibility to ascertain any direction's compliance with the terms of
the Plans or of any applicable law or the direction's effect for tax
purposes or otherwise; nor shall the Trustee have any responsibility to
see to the application of any disbursement.
(b) The Trustee shall not be required to make any disbursement in
excess of the net realizable value of the assets of the Trust at the time
of the disbursement. In the case of a distribution of less than the
entire account to a participant or beneficiary, the Administrator shall
provide a written direction as to the particular assets to be converted to
cash for the purpose of making the distribution.
(c) The Trustee shall value the Trust assets on each "valuation
date." For this purpose, "valuation date" shall mean any date on which
the New York Stock Exchange is open.
Section 4. INVESTMENT OF TRUST.
(a) SELECTION OF INVESTMENT OPTIONS. The Trustee shall have no
responsibility for the selection of investment options under the Trust and
shall not render investment advice to any person in connection with the
selection of such options.
(b) AVAILABLE INVESTMENT OPTIONS. The Named Fiduciary shall direct
the Trustee as to what investment options participants in any of the Plans
may invest in, subject to the following limitations. The Named Fiduciary
may determine to offer as investment options only (i) securities issued by
the investment companies advised by Fidelity Management & Research Company
("Mutual Funds"), (ii) notes evidencing loans to participants in any of
the Plans in accordance with the terms of the relevant Plan, (iii)
guaranteed investment contracts chosen by the Trustee, and (iv) collective
investment funds maintained by the Trustee for qualified plans; provided,
however, that the Trustee shall be considered a fiduciary with investment
discretion only with respect to Plan assets that are invested in
guaranteed investment contracts chosen by the Trustee or in collective
investment funds maintained by the Trustee for qualified plans.
(c) PARTICIPANT DIRECTION. Each participant in any of the Plans
shall direct the Trustee in which investment option(s) to invest the
assets in the participant's individual accounts. Such directions may be
made by Plan participants by use of the telephone exchange system
maintained for such purposes by the Trustee or its agent, in accordance
with the Telephone Exchange Guidelines attached hereto on Schedule "G."
Any directions made by a participant using the telephone exchange system
shall be treated as a direction made in writing by the Named Fiduciary for
purposes of Section 7 hereafter. In the event that the Trustee fails to
receive a proper direction, the assets shall be invested in the securities
of the Mutual Fund set forth for such purpose on Schedule "C," until the
Trustee receives a proper direction.
(d) MUTUAL FUNDS. Trust investments in Mutual Funds shall be subject
to the following limitations:
(i) EXECUTION OF PURCHASES AND SALES. Purchases and sales of
Mutual Funds (other than for Exchanges) shall be made on the date on
which the Trustee receives from the Sponsor in good order all
information and documentation necessary to accurately effect such
purchases and sales (or in the case of a purchase, the subsequent date
on which the Trustee has received Exchanges of Mutual Funds shall be
made in accordance with the Telephone Exchange Guidelines attached
hereto as Schedule "G").
(ii) VOTING. At the time of mailing of notice of each annual or
special stockholders' meeting of any Mutual Fund, the Trustee shall
send a copy of the notice and all proxy solicitation materials to each
participant in any of the Plans who has shares of the Mutual Fund
credited to the participant's accounts, together with a voting
direction form for return to the Trustee or its designee. The
participant shall have the right to direct the Trustee as to the
manner in which the Trustee is to vote the shares credited to the
participant's accounts (both vested and unvested). The Trustee shall
vote the shares as directed by the participant. The Trustee shall not
vote shares for which it has received no directions from the
participant. With respect to all rights other than the right to vote,
the Trustee shall follow the directions of the participant and if no
such directions are received, the directions of the Named Fiduciary.
The Trustee shall have no duty to solicit directions from
participants.
(e) NOTES. The Administrator shall act as the Trustee's agent for
the purpose of holding all trust investments in notes and other loan
documentation and as such shall (i) hold physical custody of and keep safe
the notes and other loan documents, (ii) collect and remit all principal
and interest payments to the Trustee, (iii) keep the proceeds of such
loans separate from the other assets of the Administrator and clearly
identify such assets as assets of one of the Plans, (iv) advise the
Trustee of the date, amount and payee of the checks to be drawn
representing loans, and (v) cancel and surrender the notes and other loan
documentation when a loan has been paid in full.
(f) GUARANTEED INVESTMENT CONTRACTS. Trust investments in guaranteed
investment contracts ("GIC's") shall be subject to the following
limitations:
(i) COMMINGLED POOL INVESTMENTS. To the extent that the Named
Fiduciary selects as an investment option the GIC Open-End Portfolio
of the Fidelity Group Trust for Employee Benefit Plans (the "Group
Trust"), the Sponsor hereby (A) agrees to the terms of the Group Trust
and adopts said terms as a part of this Agreement, and (B)
acknowledges that it has received from the Trustee a copy of the Group
Trust, the Declaration of Separate Fund for the GIC Open-End Portfolio
of the Group Trust, and the Circular for the GIC Open-End Portfolio.
(ii) INDIVIDUALLY-MANAGED INVESTMENTS. To the extent that the
Named Fiduciary selects GIC's chosen by the Trustee as an investment
option, the Sponsor hereby directs the Trustee to choose such GIC's in
accordance with the Investment Guidelines for GIC Management attached
hereto as Schedule "H."
(g) RELIANCE OF TRUSTEE ON DIRECTIONS.
(i) The Trustee shall not be liable for any loss, or by reason
of any breach, which arises from any participant's exercise or non-
exercise of rights under this Section 4 over the assets in the
participant's accounts, except to the degree liability is imposed on
the Trustee under ERISA.
(ii) The Trustee shall not be liable for any loss, or by reason
of any breach, which arises from the Named Fiduciary's exercise or
non-exercise of rights under this Section 4, unless it was clear on
their face that the actions to be taken under the Named Fiduciary's
directions were prohibited by the fiduciary duty rules of section
404(a) of ERISA or were contrary to the terms of the Plans or this
Agreement.
(h) TRUSTEE POWERS. The Trustee shall have the following powers and
authority:
(i) Subject to paragraphs (b), (c) and (d) of this Section 4, to
sell, exchange, convey, transfer, or otherwise dispose of any property
held in the Trust, by private contract or at public auction. No
person dealing with the Trustee shall be bound to see to the
application of the purchase money or other property delivered to the
Trustee or to inquire into the validity, expediency, or propriety of
any such sale or other disposition.
(ii) Subject to paragraphs (b) and (c) of this Section 4, to
invest in guaranteed investment contracts and short term investments
(including interest-bearing accounts with the Trustee or money market
mutual funds advised by affiliates of the Trustee) and in collective
investment funds maintained by the Trustee for qualified plans, in
which case the provisions of each collective investment fund in which
the Trust is invested shall be deemed adopted by the Sponsor and the
provisions thereof incorporated as a part of this Trust as long as the
fund remains exempt from taxation under Sections 401(a) and 501(a) of
the Internal Revenue Code of 1986, as amended (the "Code").
(iii) To cause any securities or other property held as part of
the Trust to be registered in the Trustee's own name, in the name of
one or more of its nominees, or in the Trustee's account with the
Depository Trust Company of New York and to hold any investments in
bearer form, but the books and records of the Trustee shall at all
times show that all such investments are part of the Trust.
(iv) To keep that portion of the Trust in cash or cash balances
as the Named Fiduciary or Administrator may, from time to time, deem
to be in the best interest of the Trust.
(v) To make, execute, acknowledge, and deliver any and all
documents of transfer or conveyance and to carry out the powers herein
granted.
(vi) To settle, compromise, or submit to arbitration any claims,
debts, or damages due to or arising from the Trust; to commence or
defend suits or legal or administrative proceedings; to represent the
Trust in all suits and legal and administrative hearings; and to pay
all reasonable expenses arising from any such action, from the Trust
if not paid by the Sponsor.
(vii) To employ legal, accounting, clerical, and other assistance
as may be required in carrying out the provisions of this Agreement
and to pay their reasonable expenses and compensation from the Trust
if not paid by the Sponsor.
(viii) To do all other acts although not specifically mentioned
herein, as the Trustee may deem necessary to carry out any of the
foregoing powers and the purposes of the Trust.
Section 5. RECORDKEEPING TO BE PERFORMED.
(a) The Trustee shall perform those recordkeeping functions described
in Schedule "A" attached hereto. These recordkeeping functions shall be
performed within the framework of the Administrator's written directions
regarding the provisions, guidelines and interpretations of the Plans.
(b) The Trustee shall keep accurate accounts of all investments,
receipts, disbursements, and other transactions hereunder, and shall
report the value of the assets held in the Trust as of the last day of
each fiscal quarter of the Trust and, if not on the last day of a fiscal
quarter, the date on which the Trustee resigns or is removed as provided
in Section 9 of this Agreement or is terminated as provided in Section 12
(the "Reporting Date"). Within thirty (30) days following each Reporting
Date or within sixty (60) days in the case of a Reporting Date caused by
the resignation or removal of the Trustee, or the termination of this
Agreement, the Trustee shall file with the Administrator a written account
setting forth all investments, receipts, disbursements, and other
transactions effected by the Trustee between the Reporting Date and the
prior Reporting Date, and setting forth the value of the Trust as of the
Reporting Date. Except as otherwise required under ERISA, upon the
expiration of six (6) months from the date of filing such account with the
Administrator, the Trustee shall have no liability or further
accountability to anyone with respect to the propriety of its acts or
transactions shown in such account, except with respect to such acts or
transactions as to which the Sponsor shall within such six (6) month
period file with the Trustee written objections.
(c) All records generated by the Trustee in accordance with
paragraphs (a) and (b) shall be open to inspection and audit, during the
Trustee's regular business hours prior to the termination of this
Agreement, by the Administrator or any person designated by the
Administrator. Upon the resignation or removal of the Trustee or the
termination of this Agreement, the Trustee shall provide to the
Administrator, at no expense to the Sponsor, in the format regularly
provided to the Administrator, a statement of each participant's accounts
as of the resignation, removal, or termination, and the Trustee shall
provide to the Administrator or the Plans' new recordkeeper such further
records as are reasonable, at the Sponsor's expense.
(d) The Trustee's provision of the recordkeeping services set forth
in this Section 5 shall be conditioned on the Sponsor delivering to the
Trustee a copy of any amendment to the Plans as soon as administratively
feasible following the amendment's adoption, with, if reasonably
requested, an IRS determination letter or an opinion of counsel
substantially in the form of Schedule "F" covering such amendment, and on
the Administrator providing the Trustee on a timely basis with all the
information the Administrator deems necessary for the Trustee to perform
the recordkeeping services and such other information as the Trustee may
reasonably request.
(e) The Administrator shall be responsible for the preparation and
filing of all returns, reports, and information required of the Trust or
Plans by law. The Trustee shall provide the Administrator with such
information as the Administrator may reasonably request to make these
filings. The Administrator shall also be responsible for making any
disclosures to participants required by law including, without limitation,
such disclosures as may be required under federal or state truth-in-
lending laws with regard to participant loans.
Section 6. COMPENSATION AND EXPENSES. Within thirty (30) days of receipt
of the Trustee's bill, which shall be computed and billed in accordance
with Schedule "B" attached hereto and made a part hereof, as amended from
time to time, the Sponsor shall send to the Trustee a payment in such
amount. All expenses of the Trustee relating directly to the acquisition
and disposition of investments constituting part of the Trust, and all
taxes of any kind whatsoever that may be levied or assessed under existing
or future laws upon or in respect of the Trust or the income thereof,
shall be a charge against and paid from the appropriate participants'
accounts.
Section 7. DIRECTIONS AND INDEMNIFICATION.
(a) The Trustee shall be fully protected in relying on the fact that
the Named Fiduciary and the Administrator under the Plans are the
individuals or persons named as such above or such other individuals or
persons as the Sponsor may notify the Trustee in writing.
(b) Whenever the Administrator provides a direction to the Trustee,
the Trustee shall not be liable for any loss, or by reason of any breach,
arising from the direction if the direction is contained in a writing (or
is oral and immediately confirmed in a writing) signed by any individual
whose name and signature have been submitted (and not withdrawn) in
writing to the Trustee by the Administrator in the form attached hereto as
Schedule "D," provided the Trustee reasonably believes the signature of
the individual to be genuine. The Trustee shall have no responsibility to
ascertain any direction's (i) accuracy, (ii) compliance with the terms of
the Plans or any applicable law, or (iii) effect for tax purposes or
otherwise, except as otherwise provided by ERISA.
(c) Whenever the Named Fiduciary or Sponsor provides a direction to
the Trustee, the Trustee shall not be liable for any loss, or by reason of
any breach, arising from the direction (i) if the direction is contained
in a writing (or is oral and immediately confirmed in a writing) signed by
any individual whose name and signature have been submitted (and not
withdrawn) in writing to the Trustee by the Named Fiduciary in the form
attached hereto as Schedule "E," and (ii) if the Trustee reasonably
believes the signature of the individual to be genuine, unless it is clear
on the direction's face that the actions to be taken under the direction
would be prohibited by the fiduciary duty rules of section 404(a) of ERISA
or would be contrary to the terms of the Plans or this Agreement.
(d) In any other case, the Trustee shall not be liable for any loss,
or by reason of any breach, arising from any act or omission of another
fiduciary under the Plan except as provided in section 405(a) of ERISA.
(e) The Sponsor shall indemnify the Trustee against, and hold the
Trustee harmless from, any and all loss, damage, penalty, liability, cost,
and expense, including without limitation, reasonable attorneys' fees and
disbursements, that may be incurred by, imposed upon, or asserted against
the Trustee by reason of any claim, regulatory proceeding, or litigation
arising from any act done or omitted to be done by any individual or
person with respect to the Plans or Trust, excepting only any and all
loss, damage, penalty, liability, cost and expenses, including without
limitation, reasonable attorneys' fees and disbursements, arising solely
from the Trustee's negligence or bad faith.
(f) The provisions of this Section 7 shall survive the termination of
this Agreement.
Section 8. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may resign at any time upon sixty (60) days' notice
in writing to the Sponsor, unless a shorter period of notice is agreed
upon by the Sponsor.
(b) The Sponsor say remove the Trustee at any time upon sixty (60)
days' notice in writing to the Trustee, unless a shorter period of notice
is agreed upon by the Trustee.
Section 9. SUCCESSOR TRUSTEE.
(a) If the Office of Trustee becomes vacant for any reason, the
sponsor may in writing appoint a successor trustee under this Agreement.
The successor trustee shall have all of the rights, powers, privileges,
obligations, duties, liabilities, and immunities granted to the Trustee
under this Agreement. The successor trustee and predecessor trustee shall
not be liable for the acts or omissions of the other with respect to the
Trust.
(b) When the successor trustee accepts its appointment under this
Agreement, title to and possession of the Trust assets shall immediately
vest in the successor trustee without any further action on the part of
the predecessor trustee. The predecessor trustee shall execute all
instruments and do all acts that reasonably may be necessary or reasonably
may be requested in writing by the Sponsor or the successor trustee to
vest title to all Trust assets in the successor trustee or to deliver all
Trust assets to the successor trustee.
(c) Any successor of the Trustee or successor trustee, through sale
or transfer of the business or trust department of the Trustee or
successor trustee, or through reorganization, consolidation or merger, or
any similar transaction, shall, upon consummation of the transaction,
become the successor trustee under this Agreement.
Section 10. ADDITIONAL TRUSTEES. It is contemplated that there will be
several trusts in effect from time to time for purposes of the Plans.
Trustee shall have no responsibility with respect to administration of
such assets while in such other trust or trusts, and with respect to such
other trust or trusts, Trustee shall have the full protection of Section
405(b)(3) of ERISA. The Administrator may direct, in accordance with the
provisions of a Plan, that some or all of the assets of this Trust or the
income therefrom be transferred to one of the other trusts under the
Plans. Any such transfer shall be treated as a removal of Trustee for
purposes of this Agreement.
Section 11. PARTICIPATION AND WITHDRAWAL.
(a) ELIGIBILITY. Any employee benefit plan established by the
Sponsor or an Affiliated Company may be funded, in whole or in part,
through the Trust if: (i) said Plan is qualified under Section 401(a) of
the Code; (ii) said Plan is a defined contribution plan within the meaning
of Section 414(i) of the Code; (iii) the Trust is exempt from taxation
under Section 501(a) of the Code; (iv) this Agreement has been duly
adopted by the board of the directors of the Sponsor or by the board of
directors of an Affiliated Company as a trust under said Plan, and, in the
case of such Affiliated Company, the board of directors of the Sponsor has
consented thereto; and (v) the terms and provisions of said Plan are not
inconsistent with the provisions of this Agreement. "Affiliated Company"
shall mean any company which is a component member of a controlled group
of corporations within the meaning of Section 1563(a) of the Code,
determined without regard to Sections 1563(a)(4) and (e)(3)(C) thereof,
which controlled group of corporations includes as a component member the
Sponsor of any Participating Company. "Affiliated Company" shall also
mean any trade or business under common control (as defined in Sections
414(b) and 414(c) of the Code) of which a Participating Company is a
member and any entity required to be aggregated with a Participating
Company pursuant to regulations under Section 414(o) of the Code. The
Plans in this Trust from time to time shall be listed on Schedule "I"
attached hereto and made a part of this Agreement. "Participating
Company" shall mean the Sponsor or any Affiliated Company which adopts the
Trust.
(b) EFFECT ON ADOPTING COMPANY. When the Trust has been adopted
under any Plan of any Affiliated Company, such Affiliated Company shall
become a Participating Company under the Trust and shall be bound by the
decisions, actions and directions of the Sponsor, the Named Fiduciary and
the Administrator under or affecting this Agreement, and the Trustee shall
be fully protected. The Trustee shall not be required to give notice to
or obtain the consent of any Participating Company with respect to any
action to be taken by the Trustee pursuant to this Agreement, and the
Sponsor shall have the sole authority to enforce this Agreement on behalf
of any Participating Company.
(c) EQUITABLE SHARES. The Administrator shall maintain a separate
account reflecting the Equitable Share of each of the Plans, or parts
thereof, in this Trust. The Administrator shall account for contributions
and assets attributable to each of the Plans so that the assets
attributable to each of the Plans are, at all times, separately
determinable, and none of the assets attributable to one of the Plans can
be used to pay benefits under another. Notwithstanding the foregoing
provisions of this Section 11(c), Section 11(d) or any other provision of
this Agreement to the contrary, the Trustee shall be vested with legal
ownership of the assets comprising the Trust, and none of the Plans (or
any participant or beneficiary thereunder) shall have any claim or
interest in any specific asset of the Trust as a result of any manner of
accounting for any Plan's interest in the Trust (or participant's or
beneficiary's interest in such Plan). "Equitable Share" shall mean the
interest of any Plan in this Trust.
(d) WITHDRAWAL.
(i) PROCEDURE. Any Participating Company may, pursuant to
resolutions of its board of directors, at any time by written
instrument, duly executed, acknowledged and delivered to the Trustee,
the Named Fiduciary and the board of directors of the Sponsor,
withdraw from this Trust upon thirty (30) days' prior written notice
to the Named Fiduciary. Upon receipt of such notice of withdrawal,
the Named Fiduciary shall direct the Trustee to segregate the share of
assets of the Trust allocable to such Plan, or part thereof. The
Trustee shall turn over such assets to the trustee or trustees
designated by such withdrawing Participating Company as and when
directed by the Named Fiduciary.
(ii) PARTIAL WITHDRAWALS. If fewer than all of the participants
of a Plan are affected by the withdrawal, the Named Fiduciary shall
certify to the Trustee that portion of the Equitable Share of such
Plan attributable to the participants and their beneficiaries on whose
account such assets are to be segregated.
(iii) DISQUALIFICATION OF PLAN. The Named Fiduciary shall
promptly notify the Trustee if any Plan has been or is likely to be
disqualified under Section 401 of the Code. In that event, the
Equitable Share of such Plan shall be treated as a Plan withdrawn
pursuant to this Section 11(d).
(iv) NO DIVERSION OF FUNDS. In the event of the withdrawal of a
Plan, neither the segregation and transfer of the Trust assets upon
the withdrawal of a Plan, nor the execution of a new agreement and
declaration of trust by such withdrawing Plan, shall operate to permit
any part of the Trust to be used for or diverted to purposes other
than for the exclusive benefit of the participants of such Plan.
(v) TRANSFER TO QUALIFIED TRUST. The withdrawal provisions
contained in this Section 11 shall be applicable only if the
withdrawing Plan continues to cover its employees under such Plan or
under another plan qualified under Section 401(a) of the Code and
continues to fund its benefits under another trust qualified under
Section 501 of the Code. Otherwise, the termination provisions of
paragraph (vi) below shall apply.
(vi) TERMINATION. Upon any such termination, the Named Fiduciary
shall direct the Trustee to liquidate the Equitable Share of the Plan
under the Trust. After deducting estimated expenses for such
liquidation and the distribution thereof, the Trustee shall disburse
the proceeds thereof as and when directed by the Named Fiduciary.
Section 12. TERMINATION. This Agreement may be terminated at any time by
the Sponsor upon sixty (60) days' notice in writing to the Trustee. On
the date of the termination of this Agreement, the Trustee shall forthwith
transfer and deliver to such individual or entity as the Sponsor shall
designate, all cash and assets then constituting the Trust. If, by the
termination date, the Sponsor has not notified the Trustee in writing as
to whom the assets and cash are to be transferred and delivered, the
Trustee may bring an appropriate action or proceeding for leave to deposit
the assets and cash in a court of competent jurisdiction. The Trustee
shall be reimbursed by the Sponsor for all costs and expenses of the
action or proceeding including, without limitation, reasonable attorneys'
fees and disbursements.
Section 13. RESIGNATION, REMOVAL, AND TERMINATION NOTICES. All notices of
resignation, removal, or termination under this Agreement must be in
writing and mailed to the party to which the notice is being given by
certified or registered mail, return receipt requested, to the Sponsor,
c/o Jay Davidson, 1000 South 21st Street, P.O. Box 48, Fort Smith,
Arkansas 72901, and to the Trustee, c/o, John M. Kimpel, Fidelity
Investments, 82 Devonshire Street, Boston, Massachusetts 02109, or to such
other addresses as the parties have notified each other of in the
foregoing manner.
Section 14. DURATION. This Trust shall continue in effect without limit
as to time, subject, however, to the provisions of this Agreement relating
to amendment, modification, and termination thereof.
Section 15. AMENDMENT OR MODIFICATION. This Agreement may be amended or
modified at any time and from time to time only by an instrument executed
by both the Sponsor and the Trustee. Notwithstanding the foregoing, to
reflect increased operating costs, the Trustee may once each calendar year
amend Schedule "B" without the Sponsor's consent upon seventy-five (75)
days' written notice to the Sponsor.
Section 16. GENERAL.
(a) EMPLOYMENT OF AFFILIATES AS AGENTS FOR TRUSTEE. The Sponsor
acknowledges and authorizes that the Trustee may employ its affiliates to
act as its agent in the performance of its responsibilities under this
Agreement. In particular, the Sponsor specifically acknowledges and
authorizes that the Trustee may employ Fidelity Investments Institutional
Operations Company or its successor to perform recordkeeping functions
under this Agreement. The expenses and compensation of any such agent
shall be paid by the Trustee out of its fees described in Schedule "B"
attached hereto.
(b) ENTIRE AGREEMENT. This Agreement contains all of the terms
agreed upon between the parties with respect to the subject matter hereof.
(c) WAIVER. No waiver by either party of any failure or refusal to
comply with an obligation hereunder shall be deemed a waiver of any other
or subsequent failure or refusal to so comply.
(d) SUCCESSORS AND ASSIGNS. The stipulations in this Agreement shall
inure to the benefit of, and shall bind, the successors and assigns of the
respective parties.
(e) PARTIAL INVALIDITY. If any term or provision of this Agreement
or the application thereof to any person or circumstances shall, to any
extent, be invalid or unenforceable, the remainder of this Agreement, or
the application of such term or provision to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall
not be affected thereby, and each term and provision of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
(f) SECTION HEADINGS. The headings of the various sections and
subsections of this Agreement have been inserted only for the purposes of
convenience and are not part of this Agreement and shall not be deemed in
any manner to modify, explain, expand or restrict any of the provisions of
this Agreement.
(g) BENEFITS SUPPORTED ONLY BY TRUST. Any person having any claim
under any of the Plans will look solely to the Equitable Share of such
Plan in the Trust for satisfaction. In no event will the Participating
Companies or any of their officers, employees, agents, members of their
boards of directors, the original Trustee, any successor trustees, the
Named Fiduciary, the Administrator or any other fiduciary of any of the
Plans be liable in their individual capacities to any person whomsoever
under the provisions of any of the Plans and this Trust nor do any of them
guarantee in any manner the payment of benefits hereunder.
Section 17. GOVERNING LAW.
(a) This Agreement is being made in the Commonwealth of
Massachusetts, and the Trust shall be administered as a Massachusetts
trust. The validity,, construction, effect, and administration of this
Agreement shall be governed by and interpreted in accordance with the laws
of the Commonwealth of Massachusetts, except to the extent those laws are
superseded under section 514 of ERISA.
(b) The Trustee is not a party to the Plans, and in the event of any
conflict between the provisions of the Plans and the provisions of this
Agreement which affects the Trustee's duties under this Agreement, the
provisions of this Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers as of the day and year first
above written.
ARKANSAS BEST CORPORATION
Attest:
By:
Secretary Vice President
FIDELITY MANAGEMENT TRUST COMPANY
Attest:
By:
Clerk Executive Vice President
DII0CD52 25879-1
<PAGE>
AMENDMENT TO TRUST AGREEMENT
BETWEEN FIDELITY MANAGEMENT TRUST COMPANY AND
ARKANSAS BEST CORPORATION
THIS AMENDMENT, dated as of the first day of January, 1992, by and between
Fidelity Management Trust Company (the "Trustee") and Arkansas Best
Corporation (the "Sponsor");
W I T N E S S E T H:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated January 1, 1990, with regard to the Arkansas Best Corporation
Employees' Investment Plan and the ABC Treadco, Inc. Employees' Investment
Plan (collectively, the "Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said trust
agreement as provided for in Section 13 thereof;
Now therefore, in consideration of the above premises the Trustee and the
Sponsor hereby amend the trust agreement by:
(1) Amending Schedule "A" by adding the following at the end of the list
of plan investment options:
Fidelity Growth & Income Portfolio
Fidelity U.S. Equity Index Portfolio
(2) Amending Schedule "C" by adding the following at the end of the list
of plan investment options:
Fidelity Growth & Income Portfolio
Fidelity U.S. Equity Index Portfolio
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Amendment
to be executed by their duly authorized officers effective as of the day and
year first above written.
ARKANSAS BEST CORPORATION FIDELITY MANAGEMENT TRUST
COMPANY
By: By:
Date Senior Vice President Date
DII0CD52 25879-1
<PAGE>
SECOND AMENDMENT TO TRUST AGREEMENT
BETWEEN FIDELITY MANAGEMENT TRUST COMPANY AND
ARKANSAS BEST CORPORATION
THIS AMENDMENT, dated as of the thirteenth day of March, 1992, by and
between Fidelity Management Trust Company (the "Trustee") and Arkansas Best
Corporation (the "Sponsor");
W I T N E S S E T H:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated January 1, 1990, with regard to the Arkansas Best Corporation
Employees' Investment Plan and the ABC Treadco, Inc. Employees' Investment
Plan (collectively, the "Plans"); and
WHEREAS, the Sponsor has informed the Trustee that the ABC Treadco, Inc.
Employees' Investment Plan has changed its name to the Treadco, Inc.
Employees' Investment Plan; and
WHEREAS, the Trustee and the Sponsor now desire to amend said trust
agreement as provided for in Section 15 thereof;
Now therefore, in consideration of the above premises the Trustee and the
Sponsor hereby amend the trust agreement to be effective April 1, 1992 by:
(1) Amending Schedule "I" to read as follows:
PARTICIPATING PLANS
<circle> Arkansas Best Corporation Employees' Investment Plan
<circle> Treadco, Inc. Employees' Investment Plan
(2) Amending Schedule "B" by reducing the annual participant fee as
attached.
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Amendment
to be executed by their duly authorized officers effective as of April 1,
1992.
ARKANSAS BEST CORPORATION FIDELITY MANAGEMENT TRUST
COMPANY
By: By:
Date Senior Vice President Date
DII0CD52 25879-1
<PAGE>
THIRD AMENDMENT TO TRUST AGREEMENT
BETWEEN FIDELITY MANAGEMENT TRUST COMPANY AND
ARKANSAS BEST CORPORATION
THIS THIRD AMENDMENT, dated as of the 30th day of September, 1993, by and
between Fidelity Management Trust Company (the "Trustee") and Arkansas Best
Corporation ("the Sponsor").
W I T N E S S E T H:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated January 1, 1990, with regard to the Arkansas Best Corporation
Employees' Investment Plan and the Treadco, Inc. Employees' Investment Plan
(collectively, and individually, the "Plan" or the "Plans"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said trust
agreement as provided for in Section 15 thereof;
NOW THEREFORE, in consideration of the above premises the Trustee and the
Sponsor hereby amend the trust agreement by:
(1) Amending the first WHEREAS clause to read as follows:
WHEREAS, the Sponsor wishes to establish two trusts: one to hold the
assets attributable to the Arkansas Best Corporation Common Stock
for which First National Bank of Fort Smith serves as trustee; and
the other, for which Fidelity Management Trust Company Serves as
trustee, a master trust to hold and invest the remaining plan assets
under the Plan for the exclusive benefit of participants in the Plan
and their beneficiaries; and
(2) Amending the third WHEREAS clause to read as follows:
WHEREAS, the Trustee is willing to hold and invest the aforesaid
plan assets, with the exception of the Arkansas Best Corporation
Common Stock, in trust among several investment options selected by
the Named Fiduciary; and
(3) Amending Section 4(b) by inserting a new Section 4(b)(iii) and
renumbering the existing subsections accordingly to read as follows:
(iii) equity securities issued by the Sponsor or an affiliate which
are publicly traded and which are "qualifying employer securities"
within the meaning of Section 407(d)(5) of ERISA ("Sponsor
Stock"), . . .
(4) Inserting a new Section 4(i), Sponsor Stock, for which First
National Bank of Fort Smith serves as trustee to read as follows:
Section 4(i). SPONSOR STOCK FOR WHICH FIRST NATIONAL BANK OF FORT
SMITH SERVES AS TRUSTEE. Transactions involving Sponsor Stock shall
be executed in accordance with the Operating Procedures attached
hereto as Schedule "J."
(5) Amending and restating Schedules "A" and "C" as attached.
(6) Amending and restating Schedule "B" as attached.
(7) Amending and restating Schedule "G" as attached.
(8) Adding Schedule "J," Stock Operating Procedures, as attached.
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Third
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
ARKANSAS BEST CORPORATION FIDELITY MANAGEMENT TRUST
COMPANY
By: By:
Date Date
DII0CD52 25879-1
<PAGE>
FOURTH AMENDMENT TO TRUST AGREEMENT
BETWEEN FIDELITY MANAGEMENT TRUST COMPANY AND
ARKANSAS BEST CORPORATION
THIS FOURTH AMENDMENT, dated as of the 1st day of April, 1994, by and
between Fidelity Management Trust Company (the "Trustee") and Arkansas Best
Corporation ("the Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated January 1, 1990, with regard to the Arkansas Best Corporation
Employees' Investment Plan and the Treadco, Inc. Employees' Investment Plan
(collectively and individually, the "Plan" or the "Plans"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said trust
agreement as provided for in Section 15 thereof;
NOW THEREFORE, in consideration of the above premises the Trustee and the
Sponsor hereby amend the trust agreement by:
(1) Amending the Trust to reflect, effective January 1, 1994, that the
Treadco, Inc. Employees' Investment Plan will no longer be a
Participating Plan under this Agreement.
(2) Changing the name of the Trust to be the "Arkansas Best Corporation
and Affiliates Employees' Investment Trust."
(3) Amending the first WHEREAS clause, as previously amended on
September 30, 1993, to read as follows:
WHEREAS, the Sponsor wishes to establish a trust to hold and
invest plan assets under the Plan for the exclusive benefit of
participants and their beneficiaries; and
(4) Deleting the last sentence of Section 1.
(5) Amending the first sentence of Section 4(b)(i) to read as follows:
(i) Subject to paragraphs (b), (c), (d) and (i) of this Section 4.
(6) Amending and restating Section Q), in its entirety, to read as
follows:
(i) SPONSOR STOCK. Trust investments in Sponsor Stock shall be
made via the Arkansas Best Corporation Common Stock Fund. In order
to provide the necessary monies for exchanges or redemptions from
the Arkansas Best Corporation Common Stock Fund, the Sponsor agrees
that the Plan shall maintain a liquidity reserve allocated to such
investment option in the Fidelity Institutional Cash Portfolios:
Money Market Portfolio: Class A or such other Mutual Fund or
commingled money market pool as agreed to by the Sponsor and
Trustee. A cash target range shall be determined in conjunction
with the Sponsor for the cash portion of the Arkansas Best
Corporation Common Stock Fund. The Trustee is responsible for
ensuring that the actual cash held in the Arkansas Best Corporation
Common Stock Fund falls within the agreed upon range over time.
Each participant's proportional interest in the Arkansas Best
Corporation Common Stock Fund shall be measured in units of
participation, rather than shares of Sponsor Stock. Such units
shall represent a proportionate interest in all of the assets of the
Arkansas Best Corporation Common Stock Fund, which includes shares
of Sponsor Stock, short-term investments and at times, receivables
for dividends and/or Sponsor Stock sold and payables for Sponsor
Stock purchased. A Net Asset Value ("NAV") per unit will be
determined daily for each unit outstanding of the Arkansas Best
Corporation Common Stock Fund. The return earned by the Arkansas
Best Corporation Common Stock Fund will represent a combination of
the dividends paid on the shares of Sponsor Stock held by the
Arkansas Best Corporation Common Stock Fund, gains or losses
realized on sales of Sponsor Stock, appreciation or depreciation in
the market price of those shares owned, and interest on the short-
term investments held by the Arkansas Best Corporation Common Stock
Fund. Dividends received by the Arkansas Best Corporation Common
Stock Fund are reinvested in additional shares of Sponsor Stock.
Investments in Sponsor Stock shall be subject to the following
limitations:
(i) ACQUISITION LIMIT. Pursuant to the Plan, the Trust may
be invested in Sponsor Stock to the extent necessary to comply with
investment directions under Section 4(c) of this Agreement, subject
to the liquidity reserve requirements of this Section 4(i).
(ii) FIDUCIARY DUTY. The Sponsor shall continually monitor
the suitability under the fiduciary duty rules of section 404(a)(1)
of ERISA (as modified by section 404(a)(2) of ERISA) of offering
Sponsor Stock as an option for participant directed investments
under the Plan. The Trustee shall not be liable for any loss, or by
reason of any breach, which arises from the directions of the
Sponsor with respect to the acquisition and holding of Sponsor
Stock, unless it is clear on their face that the actions to be taken
under those directions would be prohibited by the foregoing
fiduciary duty rules or would be contrary to the terms of the Plan
or this Agreement. To the extent provided by Section 404(c) of
ERISA, neither the Trustee nor any other fiduciary shall be liable
for any loss, or by reason of any breach, which results from a
participant's exercise of control over the assets in his accounts.
(iii) EXECUTION OF PURCHASES AND SALES. (A) Purchases and
sales of Sponsor Stock (other than for exchanges) shall be made on
the open market on the date on which the Trustee receives from the
Sponsor in good order all information and documentation necessary to
accurately effect such purchases and sales in accordance with
participant directions (or, in the case of purchases, the subsequent
date on which the Trustee has received a wire transfer of the funds
necessary to make such purchases). Exchanges of Sponsor Stock shall
be made in accordance with the Telephone Exchange Guidelines
attached hereto as Schedule "G." Such general rules shall not apply
in the following circumstances:
(1) If the Trustee is unable to determine the number of
shares required to be purchased or sold on such day; or
(2) If the Trustee is unable to purchase or sell the
total number of shares required to be purchased or sold on such day
as a result of market conditions; or
(3) if the Trustee is prohibited by the Securities and
Exchange Commission, the New York Stock Exchange, or any other
regulatory body from purchasing or selling any or all of the shares
required to be purchased or sold on such day.
In the event of the occurrence of the circumstances described in
(1), (2), or (3) above, the Trustee shall purchase or sell such
shares as soon as possible thereafter and shall determine the price
of such purchases or sales to be the average purchase or sales price
of all such shares purchased or sold, respectively. The Trustee may
follow directions from the Named Fiduciary to deviate from the above
purchase and sale procedures provided that such direction is made in
writing by the Named Fiduciary.
(B) USE OF AN AFFILIATED BROKER. The Sponsor hereby
authorizes the Trustee to use Fidelity Brokerage Services, Inc.
("FBSI") to provide brokerage services in connection with any
purchase or sale of Sponsor Stock in accordance with directions
from Plan participants. FBSI shall execute such directions
directly or through its affiliate. National Financial Services
Company ("NFSC"). The provision of brokerage services shall be
subject to the following:
(1) As consideration for such brokerage services, the
Sponsor agrees that FBSI shall be entitled to remuneration under this
authorization provision in the amount of three and one-half cents ($.035)
commission on each share of Sponsor Stock. Any change in such
remuneration may be made only by a signed agreement between Sponsor and
Trustee.
(2) Following the procedures set forth in Department of
Labor Prohibited Transaction Class Exemption 86-128, the Trustee will
provide the Sponsor with the following documents: (1) a description of
FBSI's brokerage placement practices; (2) a copy of PTCE 86-128; and (3) a
form by which the Sponsor may terminate this authorization to use a broker
affiliated with the Trustee. The Trustee will provide the Sponsor with
this termination form annually, as well as an annual report which
summarizes all securities transaction-related charges incurred by the
Plan, and the Plan's annualized turnover rate.
(3) Any successor organization of FBSI, through
reorganization, consolidation, merger or similar transactions, shall, upon
consumption of such transaction, become the successor broker in accordance
with the terms of this authorization provision.
(4) The Trustee and FBSI shall continue to rely on this
authorization provision until notified to the contrary. The Sponsor
reserves the right to terminate this authorization upon sixty (60) days
written notice to FBSI (or its successor) and the Trustee, in accordance
with Section 11 of this Agreement.
(iv) SECURITIES LAW REPORTS. The Sponsor shall be responsible for
filing all reports required under Federal or state securities laws with
respect to the Trust's ownership of Sponsor Stock, including, without
limitation, any reports required under section 13 or 16 of the Securities
Exchange Act of 1934, and shall immediately notify the Trustee in writing
of any requirement to stop purchases mr sales of Sponsor Stock pending the
Ming of any report. The Trustee shall provide to the Sponsor such
information on the Trust's ownership of Sponsor Stock as the Sponsor may
reasonably request in order to comply with Federal or state securities
laws.
(v) VOTING AND TENDER OFFERS. Notwithstanding any other provision
of this Agreement the provisions of this Section shall govern the voting
and tendering of Sponsor Stock. The Sponsor, after consultation with the
Trustee, shall provide and pay for all printing, mailing, tabulation and
other costs associated with the voting and tendering of Sponsor Stock.
(A) VOTING.
(1) When the issuer of the Sponsor Stock files
preliminary proxy solicitation materials with the Securities and Exchange
Commission, the Sponsor shall cause a copy of all materials to be
simultaneously sent to the Trustee. Based on these materials the Trustee
shall prepare a voting instruction form. At the time of mailing of notice
of each annual or special stockholders' meeting of the issuer of the
Sponsor Stock, the Sponsor shall cause a copy of the notice and all proxy
solicitation materials to be sent to each Plan participant with an
interest in Sponsor Stock held in the Trust, together with the foregoing
voting instruction form to be returned to the Trustee or its designee.
The form shall show the proportional interest in the number of full and
fractional shares of Sponsor Stock credited to the participant's accounts
held in the Arkansas Best Corporation Common Stock Fund as of the record
date. The Sponsor shall provide the Trustee with a copy of any materials
provided to the participants and shall certify to the Trustee that the
materials have been mailed or otherwise sent to participants.
(2) Each participant with an interest in the Arkansas
Best Corporation Common Stock Fund shall have the right, acting in the
capacity of a named fiduciary within the meaning of section 402 of ERISA,
to direct the Trustee as to the manner in which the Trustee is to vote
(including not to vote) that number of shares of Sponsor Stock reflecting
such participant's proportional interest in the Arkansas Best Corporation
Common Stock Fund (both vested and unvested). Directions from a
participant to the Trustee concerning the voting of Sponsor Stock shall be
communicated in writing, or by mailgram or similar means. These
individual directions shall be held in confidence by the Trustee and shall
not be divulged to the Sponsor, or any officer or employee thereof, or any
other person. Upon its receipt of the directions, the Trustee shall vote
the shares of Sponsor Stock reflecting the participant's proportional
interest in the Arkansas Best Corporation Common Stock Fund as directed by
the participant. The Trustee shall not vote shares of Sponsor Stock
reflecting a participant's proportional interest in the Arkansas Best
Corporation Common Stock Fund for which it has received no direction from
the participant.
(3) The Trustee shall vote that number of shares of
Sponsor Stock not credited to participants' accounts which is determined
by multiplying the total number of shares not credited to participants'
accounts by a fraction of which the numerator is the number of shares of
Sponsor Stock reflecting such participants' proportional interest in the
Arkansas Best Corporation Common Stock Fund credited to participants'
accounts for which the Trustee received voting directions from
participants and of which the denominator is the total number of shares of
Sponsor Stock reflected in the proportional interests of all participants
under the Plan. The Trustee shall vote those shares of Sponsor Stock not
credited to participants' accounts which are to be voted by the Trustee
pursuant to the foregoing formula in the same proportion on each issue as
it votes those shares reflecting participants' proportional interest in
the Arkansas Best Corporation Common Stock Fund for which it received
voting directions from participants. The Trustee shall not vote the
remaining shares of Sponsor Stock not credited to participants' accounts.
(B) TENDER OFFERS.
(1) Upon commencement of a tender offer for any securities held in
the Trust that are Sponsor Stock. The Sponsor shall notify each
Plan participant with an interest in such Sponsor Stock of the tender
offer and utilize its best efforts to timely distribute or cause to be
distributed to the participant the same information that is distributed to
shareholders of the issuer of Sponsor Stock in connection with the tender
offer, and, after consulting with the Trustee, shall provide and pay for a
means by which the participant may direct the Trustee whether or not to
tender the Sponsor Stock reflecting such participants proportional
interest in the Arkansas Best Corporation Common Stock Fund (both vested
and unvested). The Sponsor shall provide the Trustee with a copy of any
material provided to the participants and shall certify to the Trustee
that the materials have been mailed or otherwise sent to participants.
(2) Each participant shall have the right to direct the
Trustee to tender or not to tender some or all of the shares of
Sponsor Stock reflecting such participant's proportional interest in
the Arkansas Best Corporation Common Stock Fund (both vested and
unvested). Directions from a participant to the Trustee concerning
the tender of Sponsor Stock shall be communicated in writing, or by
mailgram or such similar means as is agreed upon by the Trustee and
the Sponsor under the preceding paragraph. These directions shall be
held in confidence by the Trustee and shall not be divulged to the
Sponsor, or any officer or employee thereof, or any other person
except to the extent that the consequences of such directions are
reflected in reports regularly communicated to any such persons in the
ordinary course of the performance of the Trustee's services
hereunder. Me Trustee shall tender or not tender shares of Sponsor
Stock as directed by the participant. The Trustee shall not tender
shares of Sponsor Stock reflecting a participant's proportional
interest in the Arkansas Best Corporation Common Stock Fund for which
it has received no direction from the participant.
(3) The Trustee shall tender that number of shares of
Sponsor Stock not credited to participants' accounts which is
determined by multiplying the total number of shares of Sponsor Stock
not credited to participants' accounts by a fraction of which the
numerator is the number of shares of Sponsor Stock reflecting
participants' proportional interests in the Arkansas Best Corporation
Common Stock Fund for which the Trustee has received directions from
participants to tender (which directions have not been withdrawn as of
the date of this determination and of which the denominator is the
total number of shares of Sponsor Stock reflected in the proportional
interests of all participants under the Plan.
(4) A participant who has directed the Trustee to tender
some or all of the shares of Sponsor Stock reflecting the
participant's proportional interest in the Arkansas Best Corporation
Common Stock Fund may, at any time prior to the tender offer
withdrawal date, direct the Trustee to withdraw some or all of the
tendered shares reflecting the participant's proportional interest,
and the Trustee shall withdraw the directed number of shares from the
tender offer prior to the tender offer withdrawal deadline. Prior to
the withdrawal deadline, if any shares of Sponsor Stock not credited
to participants' accounts have been tendered, the Trustee shall
redetermine the number of shares of Sponsor Stock that would be
tendered under Section 4(e)(v)(B)(3) if the date of the foregoing
withdrawal were the date of determination, and withdraw from the
tender offer the number of shares of Sponsor Stock not credited to
participants' accounts necessary to reduce the amount of tendered
Sponsor Stock not credited to participants' accounts to the amount so
redetermined. A participant shall not be limited as to the number of
directions to tender or withdraw that the participant may give to the
Trustee.
(5) A direction by a participant to the Trustee to
tender shares of Sponsor Stock reflecting the participant's
proportional interest in the Arkansas Best Corporation Common Stock
Fund shall not be considered a written election under the Plan by the
participant to withdraw, or have distributed, any or all of his
withdrawable shares. The Trustee shall credit to each proportional
interest of the participant from which the tendered shares were taken
the proceeds received by the Trustee in exchange for the shares of
Sponsor Stock tendered from that interest. Pending receipt of
directions (through the Administrator) from the participant or the
Named Fiduciary, as provided in the Plan, as to which of the remaining
investment options the proceeds should be invested in, the Trustee
shall invest the proceeds in the Mutual Fund described In Schedule
"C."
(vi) SHARES CREDITED. For all purposes of this Section,
the number of shares of Sponsor Stock deemed "credited" or "reflected"
to a participant's proportional interest shall be determined as of the
last preceding valuation date. The trade date is the date the
transaction is valued.
(vii) GENERAL. With respect to all rights other than
the right to vote, the right to tender, and the right to withdraw
shares previously tendered, in the case of Sponsor Stock credited to a
participant's proportional interest in the Arkansas Best Corporation
Common Stock Fund, the Trustee shall follow the directions of the
participant and if no such directions are received, the directions of
the Named Fiduciary. The Trustee shall have no duty to solicit
directions from participants. With respect to all rights other than
the right to vote and the right to tender, in the case of Sponsor
Stock not credited to participants' accounts, the Trustee shall follow
the directions of the Named Fiduciary.
(viii) CONVERSION. All provisions in this Section 4(i)
shall also apply to any securities received as a result of a
conversion of Sponsor Stock.
(7) Amending and restating Schedule "B" as attached.
(8) Amending and restating Schedule "G" as attached.
(9) Deleting Schedule "J," Stock Operating Procedures.
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this
Fourth Amendment to be executed by their duly authorized officers
effective as of the day and year first above written.
ARKANSAS BEST CORPORATION FIDELITY MANAGEMENT TRUST COMPANY
By: By:
Date Senior Vice President Date
Title:
DII0CD52 25879-1
<PAGE>
FIFTH AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
ARKANSAS BEST CORPORATION
THIS FIFTH AMENDMENT, dated as of the first day of November, 1995, by and
between Fidelity Management Trust Company (the "Trustee") and Arkansas Best
Corporation (the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated January 1, 1990, with regard to the Arkansas Best Corporation
Employees' Investment Plan (the "Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said trust
agreement as provided for in Section 15 thereof;
NOW, THEREFORE, in consideration of the above premises the Trustee and
the Sponsor hereby amend the trust agreement by:
(1) Inserting a new WHEREAS clause to read as follows:
WHEREAS, effective October 2, 1995, the sponsor has directed
the Trustee to accept the assets of the Carolina Freight
Corporation Employee Savings and Protection Plan and the Complete
Leasing Concepts, Inc. Employee Savings and Profit Sharing Plan and
to recordkeep such assets as a division of the Arkansas Best
Corporation Employees' Investment Plan in accordance with this
Trust Agreement.
(2) Restating Schedule "I" as follows:
SCHEDULE "I"
PARTICIPATING PLANS
Arkansas Best Corporation Employees' Investment Plan
IDI 401(k) Savings Plan
Carolina Freight Corporation Employee Savings and Protection Plan
Complete Leasing Concepts, Inc. Employee Savings and Profit Sharing
Plan
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Fifth
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
ARKANSAS BEST CORPORATION FIDELITY MANAGEMENT TRUST COMPANY
By: ______________________________ By:____________________________________
Title: _____________________________ Title:
___________________________________
Date: _____________________________ Date:____________________________________
DII0CD52 25879-1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors
Arkansas Best Corporation
We consent to the incorporation by reference of our reports in the
Registration Statement (Form S-8) pertaining to the Carolina Freight
Corporation Employee Savings and Protection Plan, the Complete Leasing
Concepts, Inc. Employee Savings and Profit Sharing Plan and the IDI 401(k)
Savings Plan, all assumed by Arkansas Best Corporation, of our report
dated January 27, 1995, with respect to the consolidated financial
statements and schedule of Arkansas Best Corporation included in its
Annual Report (Form 10-K) for the year ended December 31, 1994, filed with
the Securities and Exchange Commission.
Ernst & Young
Little Rock, Arkansas
October 20, 1995
