AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 28, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20552
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BANK UNITED CORP.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
3200 SOUTHWEST FREEWAY, SUITE 2600
HOUSTON, TEXAS
(Address of Principal Executive Offices)
13-3528556
(I.R.S. Employer
Identification No.)
77027
(Zip Code)
BANK UNITED
401(K) RETIREMENT SAVINGS PLAN
(Full title of plan)
JONATHON K. HEFFRON, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
3200 SOUTHWEST FREEWAY, SUITE 2600
HOUSTON, TEXAS 77027
(Name and address of agent for service)
(713) 543-6500
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================
Proposed
Title of Securities Amount to be Maximum Aggregate Amount of
to be Registered Registered Offering Price Registration Fee
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<S> <C> <C> <C>
Class A Common Stock, 125,000 shares $5,003,906.25(3) $1,391.09(3)
$.01 par value (1)............ (2)
Plan Interests................. (4) (4) (4)
==============================================================================================
</TABLE>
(1) This Registration Statement covers the solicitation of offers to buy
shares of Class A Common Stock, $.01 par value of Bank United Corp. (the
"Class A Common Stock"), which may be directed to participants in the Bank
United 401(k) Retirement Savings Plan (the "Plan").
(2) Pursuant to Rule 416(a), this Registration Statement also registers such
indeterminate number of additional shares of Class A Common Stock issuable
in connection with stock splits, share dividends or similar transactions.
(3) Estimated pursuant to Rule 457(h) solely for the purpose of calculating
the registration fee based on the average of the high and low prices for
the Class A Common Stock on the Nasdaq National Market on June 23, 1999
($40.03125 per share).
(4) Pursuant to Rule 416(c), this Registration Statement covers an
indeterminate amount of interests to be acquired pursuant to the Plan.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
1. The following documents, or portions of documents, previously filed by
Bank United Corp. with the Securities and Exchange Commission (the "Commission")
are hereby incorporated
herein by reference:
(a) (i) Annual Report on Form 10-K for the year ended September 30,
1998;
(ii) Quarterly Report on Form 10-Q for the three months ended
December 31,
1999;
(iii) Quarterly Report on Form 10-Q for the three months ended
March 31, 1999; and
(iv) Current Reports on Form 8-K dated March 22, March 30 and
June 9, 1999.
(b) All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act") since
the end of the fiscal year covered by the annual report referred to in (a)
above.
(c) The description of the Company's Class A Common Stock, $.01 par value,
contained in the Registration Statement on Form 8-A dated July 12, 1996.
2. All reports subsequently filed by the Company, the Bank or the Bank
United 401(k) Retirement Savings Plan (the "Plan") pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable
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ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL") provides
that a corporation may indemnify directors and officers as well as other
employees and individuals against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by them in connection with specified actions, suits or proceedings, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation, a "derivative action") if they acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, if they had no reasonable cause to believe their conduct was
unlawful. A similar standard is applicable in the case of derivative actions,
except that indemnification only extends to expenses (including attorneys' fees)
incurred in connection with the defense or settlement of such actions, and the
statute requires court approval before there can be any indemnification where
the person seeking indemnification has been found liable to the corporation. The
statute provides that it is not exclusive of other indemnification that may be
granted by a corporation's bylaws, disinterested director vote, stockholder
vote, agreement or otherwise.
The Restated Certificate of Incorporation of the Company (the
"Certificate") provides that each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that such person, or a person of whom such person is the legal
representative, is or was a director, officer of the Company or is or was
serving at the request of the Company as a director, officer, employee or agent
of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, will be indemnified and held harmless by
the Company to the fullest extent authorized by the DGCL, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such amendment), against all expense, liability and loss reasonably incurred or
suffered by such person in connection therewith. Such right to indemnification
includes the right to have the Company pay the expenses incurred in defending
any such proceeding in advance of its final disposition, subject to the
provisions of the DGCL. Such rights are not exclusive of any other right which
any person may have or thereafter acquire under any statute, provision of the
Certificate, bylaws, agreement, vote of stockholders or disinterested directors
or otherwise. No repeal or modification of such provision will in any way
diminish or adversely affect the rights of
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any director, officer, employee or agent of the Company thereunder in respect of
any occurrence or matter arising prior to any such repeal or modification. The
Certificate also specifically authorizes the Company to maintain insurance and
to grant similar indemnification rights to employees or agents of the Company.
The DGCL permits a corporation to provide in its certificate of
incorporation that a director of the corporation shall not be personally liable
to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability for (i) any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) payments of unlawful dividends or unlawful stock
repurchases or redemptions, or (iv) any transaction from which the director
derived an improper personal benefit.
The Certificate provides that a director of the Company will not be
personally liable to the Company or its stockholders for monetary damages for
breach of fiduciary duty as a director, except, if required by the DGCL as
amended from time to time, for liability (i) for any breach of the director's
duty of loyalty to the Company or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the DGCL, which concerns unlawful payments of
dividends, stock purchases or redemptions, or (iv) for any transaction from
which the director derived an improper personal benefit. Neither the amendment
nor repeal of such provision will eliminate or reduce the effect of such
provision in respect of any matter occurring, or any cause of action, suit or
claim that, but for such provision would accrue or arise prior to such amendment
or repeal.
Lewis S. Ranieri, Salvatore A. Ranieri, and Scott A. Shay, who are
directors of the Company, may be entitled to indemnification from Hyperion
Partners L.P. and Hyperion Ventures L.P., the former upstream affiliates of the
Company. Such former upstream affiliates, at their sole discretion, may elect to
indemnify other persons who serve as directors or officers of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION
Not Applicable
ITEM 8. EXHIBITS
4.1 Master Trust Agreement, dated July 1, 1991 between United Savings
Association of Texas FSB and Fidelity Management Trust Company, as
amended.
4.2 Bank United 401(k) Retirement Savings Plan.
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<PAGE>
5.1 Opinion of Jonathan K . Heffron, Esq., General Counsel.
5.2 In lieu of an Internal Revenue Service ("IRS") determination letter that
the Plan is qualified under Section 401 of the Internal Revenue Code, the
Registrant undertakes that (i) its wholly-owned subsidiary, Bank United,
will submit or has submitted the Plan and any amendment thereto to the IRS
in a timely manner, and (ii) it has caused or will cause Bank United to
make all changes required by the IRS in order to maintain the
tax-qualified status of the Plan.
15.1 Letter of Deloitte & Touche LLP.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Jonathon K. Heffron (included in his opinion filed as
Exhibit 5.1).
24.1 Powers of Attorney.
ITEM 9. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to the registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (i) and (ii) do not apply if the
registration statement is on Form S-8 and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the registration
statement.
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<PAGE>
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) To submit the Plan and, from time to time any amendments thereto, to
the IRS in a timely manner and to make all changes required by the IRS in order
to continue to maintain the tax-qualified status of the Plan.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the 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.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on June 25, 1999.
BANK UNITED CORP.
By: /s/ BARRY C. BURKHOLDER
Barry C. Burkholder, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates
indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/BARRY C. BURKHOLDER President and Chief June 25, 1999
Barry C. Burkholder Executive Officer and
Director
(principal executive officer)
* Chief Financial Officer and June 25, 1999
Anthony J. Nocella Director
(principal financial and
accounting officer)
* Director June 25, 1999
Dr. Lawrence Chimerine
* Director June 25, 1999
David M. Golush
* Director June 25, 1999
Paul M. Horvitz, Ph.D.
* Director June 25, 1999
Alan E. Master
* Director June 25, 1999
Lewis S. Ranieri
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* Director June 25, 1999
Salvatore A. Ranieri
* Director June 25, 1999
Scott A. Shay
* Director June 25, 1999
Patricia A. Sloan
* Director June 25, 1999
Michael S. Stevens
*
Kenrick R. Wilson III Director June 25, 1999
/s/ BARRY C. BURKHOLDER
*By: Barry C. Burkholder
Attorney-in-Fact
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the Plan has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, and the State of
Texas, on June 25, 1999.
BANK UNITED
401(K) RETIREMENT SAVINGS PLAN
By: /s/ BARRY C. BURKHOLDER
Barry C. Burkholder
Authorized Representative
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Trust Agreement
Between
United Savings Association of Texas FSB
And
Fidelity Management Trust Company
--------------------------------------------
UNITED SAVINGS ASSOCIATION OF TEXAS FSB
EMPLOYEES' TAX DEFERRED SAVINGS PLAN
TRUST
--------------------------------------------
Dated as of July 1, 1991
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
1 Trust .............................................................. 2
2 Exclusive Benefit and Reversion of Sponsor Contributions ........... 2
3 Disbursements ...................................................... 3
(a) Directions from Administrator
(b) Limitations
4 Investment of Trust ................................................ 3
(a) Selection of Investment Options
(b) Available Investment Options
(c) Participant Direction
(d) Mutual Funds
(e) Notes
(f) Guaranteed Investment Contracts
(g) Reliance of Trustee on Directions
(h) Trustee Powers
5 Recordkeeping to Be Performed ...................................... 8
(a) General
(b) Accounts
(c) Inspection and Audit
(d) Effect of Plan Amendment
(e) Returns, Reports and Information
6 Compensation and Expenses .......................................... 10
7 Directions and Indemnification ..................................... 10
(a) Identity of Administrator and Named Fiduciary
(b) Directions from Administrator
(c) Directions from Named Fiduciary
(d) Co-Fiduciary Liability
(e) Indemnification
(f) Survival
8 Resignation or Removal of Trustee .................................. 12
(a) Resignation
(b) Removal
9 Successor Trustee .................................................. 12
(a) Appointment
(b) Acceptance
(c) Corporate Action
10 Termination ........................................................ 13
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TABLE OF CONTENTS (Continued)
SECTION PAGE
11 Resignation, Removal, and Termination Notices ..................... 13
12 Duration .......................................................... 13
13 Amendment or Modification ......................................... 14
14 General ........................................................... 14
(a) Performance by Trustee, its Agent or Affiliates
(b) Entire Agreement
(c) Waiver
(d) Successors and Assigns
(e) Partial Invalidity
(f) Section Headings
15 Governing Law ..................................................... 15
(a) Massachusetts Controls
(b) Trust Agreement Controls
SCHEDULES
A. Recordkeeping Services
B. Fee Schedule
C. Investment Options
D. Administrator's Authorization Letter
E. Named Fiduciary's Authorization Letter
F. IRS Determination Letter or Opinion of Counsel
G. Telephone Exchange Guidelines
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TRUST AGREEMENT, dated as of the first day of July, 1991, between United
Savings Association of Texas FSB, a Texas corporation, having an office at 3200
S.W. Freeway; Suite 1600, Houston, TX 77027 (the "SPONSOR"), and FIDELITY
MANAGEMENT TRUST COMPANY, a Massachusetts trust company, having an office at 82
Devonshire Street, Boston, Massachusetts 02109 (the "TRUSTEE").
WITNESSETH:
WHEREAS, the Sponsor is the sponsor of the United Savings Association of
Texas FSB Employees' Tax Deferred Savings Plan (the "PLAN"); and
WHEREAS, the Sponsor wishes to establish a trust to hold and invest plan
assets under the Plan for the exclusive benefit of participants in the Plan and
their beneficiaries; and
WHEREAS, the Administrative Committee (the "NAMED FIDUCIARY") is the named
fiduciary of the Plan (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 Plan; and
WHEREAS, the Sponsor (the "ADMINISTRATOR") is the administrator of the
Plan (within the meaning of section 3(16)(A) of ERISA); and
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WHEREAS, the Trustee is willing to perform recordkeeping services for the
Plan 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 United Savings Association
of Texas FSB Employees' Tax Deferred Savings Plan Trust (the "TRUST"), with the
Trustee. 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 transferred from a previous trustee under the Plan, such additional sums of
money as shall from time to time be delivered to the Trustee under the Plan, 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 the assets received by it, subject
to the terms and conditions of this Agreement.
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 Plan or
their beneficiaries prior to the satisfaction of all liabilities with respect to
the participants and their beneficiaries.
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Section 3. DISBURSEMENTS.
(a) DIRECTIONS FROM ADMINISTRATOR. The Trustee shall make disbursements in
the amounts and in the manner that the Administrator directs from time to time
in writing. The Trustee shall have no responsibility to ascertain any
direction's compliance with the terms of the Plan 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) LIMITATIONS. 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. The Trustee shall not be required to make any disbursement in
cash unless the Administrator has provided a written direction as to the assets
to be converted to cash for the purpose of making the disbursement.
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 Plan participants 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 Plan participants in accordance with the terms of the Plan,
(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"), (iv) guaranteed
investment contracts chosen by the Trustee, (v) guaranteed annuity contracts
heretofore entered into
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by the Sponsor or predecessor trustee and specifically identified on Schedule
"G" attached hereto ("EXISTING GICS"), and (vi) collective investment funds
maintained by the Trustee for qualified plans; provided, however, that the Named
Fiduciary hereby directs the Trustee to continue to hold such Existing GICs
until the Named Fiduciary directs otherwise, it being expressly understood that
such direction is given in accordance with Section 403(a) of ERISA; and
provided, further, 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. The investment
options initially selected by the Named Fiduciary are identified on Schedules
"A" and "C" attached hereto. The Named Fiduciary may add additional investment
options with the consent of the Trustee and upon mutual amendment of this Trust
Agreement and the Schedules thereto to reflect such additions.
(c) PARTICIPANT DIRECTION. Each Plan participant 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 written Telephone Exchange Guidelines attached hereto
as Schedule "G". With respect to any direction made by a participant using the
telephone exchange system, the Trustee shall have no responsibility to ascertain
such direction's (i) accuracy, (ii) compliance with the terms of the Plan or any
applicable law, or (iii) effect for tax purposes or otherwise. 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. The Sponsor hereby acknowledges that it has received from
the Trustee a copy of the prospectus for each Mutual Fund selected by the Named
Fiduciary as a Plan investment option. Trust investments in Mutual Funds shall
be subject to the followiftg limitations:
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(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 a wire transfer
of funds necessary to make such purchase). 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 Plan participant 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 participant loan notes and related
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
Plan assets, (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.
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(f) 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 as otherwise provided 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 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 Plan or
this Agreement.
(g) 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
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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.
(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, provided that the Sponsor is notified in writing prior to the
employment of any such assistance.
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(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) GENERAL. 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 Plan's provisions, guidelines and interpretations.
(b) ACCOUNTS. 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 Plan 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 8 of this Agreement or
is terminated as provided in Section 10 (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
8
<PAGE>
transactions as to which the sponsor shall within such six (6) month period file
with the Trustee written objections; provided, however, nothing in this Section
5(b) shall act or be construed as relieving the Trustee of any of its fiduciary
liabilities with respect to such account or as an indemnification by the Sponsor
of the Trustee for any of its errors or breaches of its fiduciary duties with
respect to such account.
(c) INSPECTION AND AUDIT. 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 Plan's new recordkeeper such
further records as are reasonable, at the Sponsor's expense.
(d) EFFECT OF PLAN AMENDMENT. 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 Plan as soon as
administratively feasible following the amendment's adoption, with, if
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) RETURNS, REPORTS AND INFORMATION. The Administrator shall be responsible
for the preparation and filing of all returns, reports, and information required
of the Trust or Plan 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
9
<PAGE>
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 reasonable
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 Plan participants' accounts.
Section 7. DIRECTIONS AND INDEMNIFICATION.
(a) IDENTITY OF ADMINISTRATOR AND NAMED FIDUCIARY. The Trustee shall be
fully protected in relying on the fact that the Named Fiduciary and the
Administrator under the Plan 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) DIRECTIONS FROM ADMINISTRATOR. 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
10
<PAGE>
ascertain any direction's (i) accuracy, (ii) compliance with the terms of the
Plan or any applicable law, or (iii) effect for tax purposes or otherwise.
(c) DIRECTIONS FROM NAMED FIDUCIARY. 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 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 Plan or this
Agreement.
(d) CO-FIDUCIARY LIABILITY. 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) INDEMNIFICATION. 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 are 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 Plan or Trust, excepting only any and all loss, etc., arising from the
Trustee's willful misconduct, negligence, bad faith, or breach of any duty under
ERISA.
11
<PAGE>
(f) SURVIVAL. The provisions of this Section 7 shall survive the termination
of this Agreement.
Section 8. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) RESIGNATION. 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 in writing by the Sponsor.
(b) REMOVAL. The Sponsor may 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 in writing by the Trustee.
Section 9. SUCCESSOR TRUSTEE.
(a) APPOINTMENT. 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) ACCEPTANCE. 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.
12
<PAGE>
(c) CORPORATE ACTION. 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. TERMINATION. This Agreement may be terminated at any time by the
Sponsor upon sixty (60) days' notice in writing to the Trustee unless the
Trustee agrees to a shorter notice period. 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 reasonable
costs and expenses of the action or proceeding including, without limitation,
reasonable attorneys' fees and disbursements.
Section 11. 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 Randolph C.
Henson, United Savings Association FSB, 3200 S.W. Freeway, Suite 1600, Houston,
TX 77027, 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 12. 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.
13
<PAGE>
Section 13. 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 14. GENERAL.
(a) PERFORMANCE BY TRUSTEE, ITS AGENT OR AFFILIATES. The Sponsor
acknowledges and authorizes that the services to be provided under this
Agreement shall be provided by the Trustee, its agents or affiliates including
Fidelity Investments Institutional Operations Company or its successor.
(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.
14
<PAGE>
(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.
Section 15. GOVERNING LAW.
(a) MASSACHUSETTS LAW CONTROLS. 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) TRUST AGREEMENT CONTROLS. The Trustee is not a party to the Plan, and in
the event of any conflict between the provisions of the Plan and the provisions
of this Agreement, the provisions of this Agreement shall control to the extent
not inconsistent with applicable law.
15
<PAGE>
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.
UNITED SAVINGS ASSOCIATION OF
TEXAS FSB
Attest: /s/ CAN NOT READ NAME By /s/ CAN NOT READ NAME
Secretary Vice President
Vice President, Compensation
and Benefits
FIDELITY MANAGEMENT TRUST
COMPANY
Attest: /s/ CAN NOT READ NAME By /s/ CAN NOT READ NAME
Assistant C1erk Senior Vice President
16
<PAGE>
Schedule "A"
ADMINISTRATIVE SERVICES
ADMINISTRATION
* Establishment and maintenance of participant account and election
percentages.
* Maintenance of five plan investment options:
- Fidelity Money Market Trust: Retirement Money Market Portfolio
- Fidelity Intermediate Bond Fund
- Fidelity Growth & Income Portfolio
- Fidelity Fund
- Fidelity Magellan Fund
* Maintenance of five money classifications:
- Fully Vested
- Employee Tax Deferred
- Employer
- Prior Plan
- Rollovers
* Processing of mutual fund trades.
The Trustee will provide only the recordkeeping services set forth on this
Schedule "A" and no others.
PROCESSING
* Monthly processing of contribution data.
* Daily processing of transfers and changes of future allocations.
* Monthly processing of withdrawals.
OTHER
* Monthly trial balance
* Quarterly administrative reports
* Quarterly participant statements
* 1099-Rs
* Participant Loans
* Performance of section 401(k) limitation testing upon request. In order to
obtain this service, the client shall be required to provide the information
identified in the Fidelity Discrimination Testing Package Guidelines.
* Employee communications describing available investment options, including
multimedia informational materials and group presentations.
UNITED SAVINGS ASSOCIATION OF FIDELITY MANAGEMENT TRUST COMPANY
TEXAS FSB
By /s/ SIG. ILLEGIBLE 6/21/91 By /s/ SIG. ILLEGIBLE 7/15/91
Date Senior Vice President Date
17
<PAGE>
Schedule "B"
FEE SCHEDULE
o Annual Participant Fee $20.00 per participant*, subject to a
$15,000 per year minimum, billed and
payable quarterly.
o Conversion Fee $2.50 per participant, subject to a
$2,500 minimum, a one-time fee billed
and payable at the conclusion of the
conclusion of the first quarter for
which services are performed.
o Loan Fees Establishment fee of $10.00 per loan
account; annual fee of $15.00 per loan
account.
o Other Fees: separate charges for optional ADP testing or use of remote
access or extraordinary expenses resulting from large numbers of
simultaneous manual transactions or from errors not caused by Fidelity.
* This fee will be imposed pro rata for each CALENDAR quarter, or any part
thereof, that it remains necessary to keep a participant's account(s) as
part of the Plan's records, e.g., vested, deferred, forfeiture, top-heavy
and terminated participants who must remain on file through calendar
year-end for 1099-R reporting.
TRUSTEE FEES
o To the extent that assets are invested in Mutual Funds, 0.02% per year of
such assets in the Trust payable pro rata quarterly on the basis of such
assets as of the calendar quarter's last valuation date, but no less than
$2,500.00 nor more than $5,000.00 per year.
UNITED SAVINGS ASSOCIATION OF FIDELITY MANAGEMENT TRUST COMPANY
TEXAS FSB
By /s/ SIG ILLEGIBLE 6/21/91 By /s/ SIG. ILLEGIBLE 7/15/91
Date Senior Vice President Date
18
<PAGE>
INVESTMENT OPTIONS
In accordance with Section 4(b), the Named Fiduciary hereby directs the Trustee
that participants' individual accounts may be invested in the following
investment options:
o Fidelity Money Market Trust: Retirement Money Market Portfolio
o Fidelity Intermediate Bond Fund
o Fidelity Growth & Income Portfolio
o Fidelity Fund
o Fidelity Magellan Fund
The mutual fund advised by Fidelity Management & Research Company referred to in
Section 4(c) shall be Fidelity Money Market Trust: Retirement Money Market
Portfolio.
ADMINISTRATIVE COMMITTEE OF
UNITED SAVINGS ASSOCIATION OF TEXAS FSB
/s/ KAREN J. HARTNETT 6/21/91
Karen J. Hartnett Date
/s/ RANDOLPH C. HENSON 6/24/91
Randolph C. Henson Date
/s/ ANTHONY J. NOCELLA 6/21/91
Anthony J. Nocella Date
/s/ JONATHON K. HEFFRON 6/21/91
Jonathon K. Heffron Date
/s/ CLINTON KENDRICK 6/25/91
Clinton Kendrick Date
<PAGE>
[UNITED SAVINGS LETTERHEAD]
June 21, 1991
Mr. Peter Smail
Fidelity Investments Institutional Operations Company
82 Devonshire Street
Boston, Massachusetts 02109
UNITED SAVINGS ASSOCIATION OF TEXAS FSB
EMPLOYEE'S TAX DEFERRED SAVINGS PLAN AND TRUST
Dear Mr. Smail:
This letter is sent to you in accordance with Section 7(b) of the Trust
Agreement, dated as of June 21, 1991, between United Savings Association of
Texas FSB and Fidelity Management Trust Company. I hereby designate Anthony J.
Nocella, Karen J. Hartnett, John A. Ritchie, and Caroline J. Sailer, as the
individuals who may provide directions upon which Fidelity Management Trust
Company shall be fully protected in relying. Only one such individual need
provide any direction. The signature of each designated individual is set forth
below and certified to be such.
You may rely upon each designation and certification set forth in this letter
until I deliver to you written notice of the termination of authority of
designated individual.
Very truly yours,
By /s/ KAREN J. HARTNETT 6/21/91
Karen J. Hartnett Date
Senior Vice President
/s/ ANTHONY J. NOCELLA
Anthony J. Nocella
/s/ KAREN J. HARTNETT
Karen J. Hartnett
/s/ JOHN A. RITCHIE
John A. Ritchie
/s/ CAROLINE J. SAILER
Caroline J. Sailer
<PAGE>
[UNITED SAVINGS LETTERHEAD]
June 21, 1991
Mr. Peter Smail
Fidelity Investments Institutional Operations Company
82 Devonshire Street
Boston, Massachusetts 02109
UNITED SAVINGS ASSOCIATION OF TEXAS FSB
EMPLOYEE'S TAX DEFERRED SAVINGS PLAN AND TRUST
Dear Mr. Smail:
This letter is sent to you in accordance with Section 7(c) of the Trust
Agreement, dated as of June 21, 1991, between United Savings Association of
Texas FSB and Fidelity Management Trust Company. I hereby designate Karen J.
Hartnett, Randolph C. Henson, Anthony J. Nocella, Jonathon K. Heffron,
and Clinton Kendrick, as the individuals who may provide directions upon which
Fidelity Management Trust Company shall be fully protected in relying. Only one
such individual need provide any direction. The signature of each designated
individual is set forth below and certified to be such.
You may rely upon each designation and certification set forth in this letter
until I deliver to you written notice of the termination of authority of
designated individual.
Very truly yours,
By /s/ KAREN J. HARTNETT 6/21/91
Karen J. Hartnett Date
Senior Vice President
<PAGE>
ADMINISTRATIVE COMMITTEE OF
UNITED SAVINGS ASSOCIATION OF TEXAS FSB
/s/ KAREN J. HARTNETT
Karen J. Hartnett
/s/ RANDOLPH C. HENSON
Randolph C. Henson
/s/ ANTHONY J. NOCELLA
Anthony J. Nocella
/s/ JONATHON K. HEFFRON
Jonathon K. Heffron
/s/ CLINTON KENDRICK
Clinton Kendrick
<PAGE>
[MAYOR, DAY, CALDWELL & KEETON LETTERHEAD]
June 20, 1991
Jacqueline M. White
Fidelity Institutional Retirement
Services Company
82 Devonshire Street - ZR9
Boston, MA 02109
Re: UNITED SAVINGS ASSOCIATION OF TEXAS FSB
EMPLOYEES' TAX DEFERRED SAVINGS PLAN
Dear Ms. White:
In accordance with your request, this letter sets forth our opinion with
respect to the qualified status under Section 401(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), of the United Savings Association of
Texas FSB Employees' Tax Deferred Savings Plan, as it is amended to the date of
this letter (the "Plan").
The material facts regarding the Plan as we understand them are as
follows. United Financial Group, Inc. ("UFG) was the sponsor of the United
Financial Group, Inc. Employees' Tax Deferred Savings Plan (the "UFG Plan").
United Savings Association of Texas ("USAT") was a subsidiary of UFG and an
adopting employer of the UFG Plan. The most recent favorable determination
letter as to the UFG Plan's qualified status under Section 401(a) of the Code
was issued by the Dallas District Office of the Internal Revenue Service and was
dated May 12, 1988 (copy enclosed). The version of the Plan submitted by UFG for
the District Director's review in connection with this determination letter did
not contain amendments required by the Tax Reform Act of 1986 and subsequent
federal tax acts.
The UFG Plan was amended effective February 11, 1988, in order to reflect
USAT as the new sponsor of the UFG Plan, the name of which was then changed to
the United Savings Association of Texas Employees' Tax Deferred Savings Plan
(the "USAT Plan"). Effective December 30, 1988, United Savings Association of
Texas FSB ("USAT FSB") acquired all of the assets of USAT, and UFO and USAT
ceased to be part of the same controlled group or affiliated service group under
Section 414 of the Code. Effective January 1,1989, USAT FSB assumed sponsorship
of the USAT Plan, the name of which was then changed to the United Savings
Association of Texas FSB Employees' Tax Deferred Savings Plan (the "Plan").
Effective March 31, 1989, UFG adopted, as an amendment, restatement and
continuation of its participation in the Plan, the United Financial Group, Inc.
Employees' Tax Deferred Savings Plan (the "New UFG Plan"). The terms and
provisions of the New UFG Plan were substantially
<PAGE>
Ms. Jacqueline M. White
June 20, 1991
Page 2
identical to the terms and provisions of the Plan. Effective June 30, 1989, the
assets of the Plan held on behalf of employees of UFG were transferred from the
trust maintained in connection with the Plan to the trust maintained in
connection with the New UFG Plan. Consequently, the Plan does not currently hold
any assets for the account of employees of UFG.
The Plan has been amended and restated, effective January 1, 1989, to
incorporate applicable requirements of the Tax Reform Act of 1986 and subsequent
federal tax acts. USAT FSB has informed us that it intends to submit the amended
and restated Plan to the Dallas District Director of the Internal Revenue
Service and to request from him a favorable determination letter as to the
Plan's qualified status under Section 401(a) of the Code. USAT FSB may have to
make some modifications to the Plan at the request of the Internal Revenue
Service in order to obtain this favorable determination letter, but we do not
expect any of these modifications to be material. USAT FSB has informed us that
it will make these modifications.
Based on the foregoing statements of USAT FSB and our review of the
provisions of the Plan, as amended and restated effective January 1, 1989, it is
our opinion that the Internal Revenue Service will issue a favorable
determination letter as to the qualified status of the Plan, as modified at the
request of the Internal Revenue Service, under Section 401(a) of the Code,
subject to the customary condition that qualification of the Plan, as modified,
will depend on its effect in oporation.
Sincerely,
MAYOR, DAY, CALDWELL & KEETON
By /s/ JESSE J. GELSOMINI
Jesse J. Gelsomini
cc: Ms. Karen J. Hartnett,
Senior Vice President
United Savings Association of
Texas FSB
Mr. J. Gerald Martin (Firm)
<PAGE>
1100 COMMERCE STREET Employer Identification Number:
DALLAS, TX 75242 74-2029669
File Folder Number:
Date: 12 May 1988 760000205
Person to Contact:
UNITED FINANCIAL GROUP INC EP TECHNICAL ASSISTOR
C/O J. GERALD MARTIN Contact Telephone Number:
1900 REPUBLICBANK CENTER (214) 767-1204
HOUSTON, TX 77002 Plan Name:
EMPLOYEES TAX DEFERRED SAVINGS PLAN
Plan Number: 001
Dear Applicant
Based on the information supplied, we have made a favorable determination
on your application identified above. Please keep this letter in your permanent
records.
Continued qualification of the plan will depend on its effect in operation
under its present form. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) The status of the plan in operation will be reviewed periodically.
The enclosed document describes the impact of Notice 86-13 and some events
that could occur after you receive this letter that would automatically nullify
it without specific notice from us. The document also explains how operation of
the plan may effect a favorable determination letter, and contains information
about filing requirements.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other Federal or
local statutes.
This determination expresses an opinion on whether the amendment(s), in and
of itself (themselves), affect(s) the continued qualified status of the plan
under Code section 401 and the exempt status of the related trust under section
501(a). This determination should not be construed as an opinion on the
qualification of the plan as a whole and the exempt status of the related trust
as a whole.
We have sent a copy of this letter to your representative as indicated in
the power of attorney.
This determination letter is applicable for the amendment(s) adopted on
FEB 9, 1988.
<PAGE>
-2-
UNITED FINANCIAL GROUP INC
If you have any questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ GLENN CAGLE
Glen Cagle
District Director
Enclosures:
Publication 794
OPWBP 515
<PAGE>
-3-
UNITED FINANCIAL GROUP INC
THIS DETERMINATION ALSO APPLIES TO: UNITED FINANCIAL GROUP INC., UNITED CAPITAL
MORTGAGE CORPORATION, UNITED REPUBLIC, REINSURANCE AND UNITED SAVINGS
ASSOCIATION OF TEXAS.
<PAGE>
Schedule "G"
TELEPHONE EXCHANGE PROCEDURES
The following telephone exchange procedures are currently employed by Fidelity
Investments Retirement Services Company (FIRSCO).
Telephone exchange hours are 8:30 a.m. (EST) to 8:00 p.m. (EST) on each business
day. A "business day" is any day on which the New York Stock Exchange is open.
FIRSCO reserves the right to change these telephone exchange procedures at its
discretion.
MUTUAL FUNDS
EXCHANGES BETWEEN MUTUAL FUNDS
Participants may call on any business day to exchange between the mutual
funds. If the request is received before 4:00 p.m. (EST), it will receive
that day's trade date. Calls received after 4:00 p.m. (EST) will be
processed on a next day basis.
UNITED SAVINGS ASSOCIATION OF TEXAS FSB
By /s/ SIG. ILLEGIBLE
Date
23
<PAGE>
FIRST AMENDMENT TO TRUST AGREEMENT
BETWEEN FIDELITY MANAGEMENT TRUST COMPANY AND
UNITED SAVINGS ASSOCIATION OF TEXAS FSB
THIS AMENDMENT, dated as of the first day of September, 1992, by and between
Fidelity Management Trust Company (the "Trustee") and United Savings Association
of Texas FSB (the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated July 1, 1991, with regard to the United Savings Association of
Texas FSB Employees' Tax Deferred Savings Plan (the "Plan"); and
WHEREAS, the Sponsor has informed the Trustee that Bank United of Texas FSB
has adopted and become the Sponsor of the United Savings Association of Texas
FSB Employees' Tax Deferred Savings Plan Trust; and
WHEREAS, the Trustee and the Company 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
Company hereby amend the trust agreement by:
(1) Amending the first "WHEREAS" clause to read as follows:
WHEREAS, the Sponsor is the sponsor of the Bank United of Texas FSB
Employees' Tax Deferred Savings Plan (the "PLAN"); and
(2) Amending the first sentence of Section 1 to read as follows:
Section 1. TRUST. The Sponsor hereby establishes the Bank United
of Texas FSB Employees' Tax Deferred Savings Plan Trust (the "TRUST").
IN WITNESS WHEREOF, the Trustee and the Company have caused this Amendment to be
executed by their duly authorized officers effective as of the day and year
first above written.
BANK UNITED OF TEXAS FSB
By 9/10/92 /s/ SIG ILLEGIBLE
Date Senior Vice President Date
FIDELITY MANAGEMENT TRUST COMPANY
/s/ SIG. ILLEGIBLE 10/7/92
Senior Vice President Date
<PAGE>
SECOND AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
BANK UNITED OF TEXAS FSB
ThIS SECOND AMENDMENT, dated as of the first day of January, 1994, by
and between Fidelity Management Trust Company (the "Trustee") and Bank United
of Texas FSB (the "Sponsor");
WITNESSETH:
WHEREAS. the Trustee and the Sponsor heretofore entered into a trust
agreement dated July 1, 1991, with regard to the Bank United of Texas FSB
Employees' Tax Deferred Savings Plan (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 and adding the following mutual funds to the "investment
options" portion of Schedules "A" and "C", as follows:
Fidelity Asset Manager
Fidelity Asset Manager: Growth
Fidelity Asset Manager: Income
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Second
Amendment to be executed by their duly authorized officers effective as of
the day and year flrst above written.
BANK UNITED OF TEXAS FSB FIDELITY MANAGEMENT
TRUST COMPANY
By /s/ CAN NOT READ NAME 12/14/93 By /s/ CAN NOT READ NAME 12/28/93
Date Senior Vice President Date
By /s/ CAN NOT READ NAME 12/14/93
<PAGE>
THIRD AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
BANK UNITED OF TEXAS FSB
THIS THIRD AMENDMENT, dated as of the first day of April, 1995, by and
between Fidelity Management Trust Company (the "Trustee") and Bank United of
Texas FSB (the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated July 1, 1991, with regard to the Bank United of Texas FSB
Employees' Tax Deferred Savings Plan( 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:
(I) Amending and adding the following mutual funds to the "investment
options" portion of Schedules "A" and "C", as follows:
- Fidelity Overseas Fund
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.
BANK UNITED OF TEXAS FSB FIDELITY MANAGEMENT TRUST
COMPANY
By /s/ CAN NOT READ NAME 3/9/95 By /s/ CAN NOT READ NAME 3/30/95
Date Vice President Date
<PAGE>
FOURTH AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
BANK UNITED OF TEXAS FSB
THIS FOURTH AMENDMENT, dated as of the fifteenth day of November, 1995, by
and between Fidelity Management Trust Company (the "Trustee" and Bank United of
Texas FSB (the "Sponsor"); and
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated July 1, 1991, with regard to the Bank United of Texas FSB
Employees' Tax Deferred Savings Plan (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 and restating Section 4(e) in its entirety, to read as
follows:
(e) NOTES. The Administrator shall act as the Trustee's agent for the
purpose of holding all trust investments in participant loan notes and
related 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 Plan assets and (iv)
cancel and surrender the notes and other loan documentation when a
loan has been paid in full. To originate a participant loan, the Plan
participant shall notity the Trustee of the request by use of the
Telephone Exchange System. The Trustee shall determine, based on the
current value of the Plan participant's account, the amount available
for the loan. The Plan participant shall then direct the Trustee
regarding the amount to be borrowed and the term or period for
repayment. Based on the most recent interest rate supplied by the
Sponsor in accordance with the terms of the Plan, the Trustee shall
advise the Plan participant of such interest rate, as well as the
installment payment amounts. The Trustee shall forward the loan
document to the Plan participant for execution and submission for
approval to the Administrator. The Administrator shall have the
responsibility for approving the loan, via remote access, and
instructing the Trustee of such approval. The Trustee shall send the
loan proceeds to the Administrator or to the Plan participant in
accordance with the directions from the Administrator. In all cases,
such approval by the Administrator shall be made within 30 days of the
Plan participant's initial request (the origination date).
(2) Amending Schedule "A" by adding a fourth bullet point to the
processing section as follows:
* Enroll new participants via telephone; provide confirmation of
enrollment within five (5) business days of the request.
(3) Amending Schedule "A" by adding a fifth bullet point to the processing
section as follows:
<PAGE>
* Daily processing of changes of deferral percentages; prepare and mail
to the participant a confirmation of telephonic instructions relative
to deferral percentages within five (5) business days of the
participant's instructions.
(4) Amending Schedule "B" to reflect the Loan Fee as follows:
Loan Fees Establishment fee of $35.00 per loan
account; annual fee of $15.00 per loan
account.
Enrollment by Phone $5.00 per non-active employee residing on
Fidelity's participant recordkeeping
system
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.
BANK UNITED OF TEXAS FSD. FIDELITY MANAGEMENT TRUST COMPANY
By /s/ SIG ILLEGIBLE 10/11/95 By /s/ SIG ILLEGIBLE 11/6/95
Date Vice President Date
<PAGE>
FIFTH AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
BANK UNITED
THIS FIFTH AMENDMENT, dated as of the first day of July, 1999, by and
between Fidelity Management Trust Company (the "Trustee") and Bank United (the
"Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a Trust
Agreement dated July 1, 1991, with regard to the Bank United 401(k) Retirement
Savings Plan (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 Section 3, DISBURSEMENTS, by adding a new subsection (b) as
follows and relettering all subsequent subsections:
(b) PARTICIPANT WITHDRAWAL REQUESTS. The Sponsor hereby directs
that, pursuant to the Plan, a Participant withdrawal request
(in-service or full withdrawal) may be made by the Participant
by telephone or such other means as may be agreed to by the
Sponsor and the Trustee, and the Trustee shall process such
request only after the identity of the Participant is verified
by use of a personal identification number ("PIN") and social
security number. The Trustee shall process such withdrawal in
accordance with written guidelines provided by the Sponsor and
documented in the Plan Administrative Manual. In the case of a
hardship withdrawal request, the Trustee shall forward the
withdrawal document to the participant for execution and
submission for approval to the Administrator. The
Administrator shall have the responsibility for approving the
hardship withdrawal and instructing the Trustee to send the
proceeds to the Administrator or to the participant if so
directed by the Administrator.
(2) Amending Section 4, INVESTMENT OF TRUST, by restating subsection (e)
as follows:
(e) NOTES. The Administrator shall act as the Trustee's agent for
participant loan notes and as such shall (i) separately
account for repayments of such loans and clearly identify such
assets as Plan assets and (ii) collect and remit all principal
and interest payments to the Trustee. To originate a
participant loan, the Plan participant shall direct the
Trustee as to the term and amount of the loan to be made from
the participant's individual account. Such directions shall be
made by Plan participants by use of the telephone exchange
system maintained for such purpose by the Trustee or its
agent, or such other means as may be agreed to by the Sponsor
and the Trustee. The Trustee shall determine, based on the
current value of the participant's account on the date of the
request and any guidelines provided by the Sponsor, the amount
available for the loan. Based
<PAGE>
on the interest rate supplied by the Sponsor in accordance
with the terms of the Plan, the Trustee shall advise the
participant of such interest rate, as well as the installment
payment amounts. The Trustee shall distribute the Participant
loan agreement and truth-in-lending disclosure with the
proceeds check to the participant. To facilitate
recordkeeping, the Trustee may destroy the original of any
promissory note made in connection with a loan to a
participant under the Plan, provided that the Trustee first
creates a duplicate by a photographic or optical scanning or
other process yielding a reasonable facsimile of the
promissory note and the Plan participant's signature thereon,
which duplicate may be reduced or enlarged in size from the
actual size of the original promissory note.
(3) Amending Section 4, INVESTMENT OF TRUST, by inserting the following
new Section 4(h) SPONSOR STOCK:
(h) SPONSOR STOCK. Trust investments in Sponsor Stock shall be
made via the Bank United Corp. Common Stock Fund (the "Stock
Fund"). Investments in the Stock Fund shall consist primarily
of shares of Sponsor Stock. In order to satisfy daily
participant requests for transfers and payments, the Stock
Fund shall also include cash or short-term liquid investments
in accordance with this paragraph. Such holdings may include
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. The
Sponsor shall, after consultation with the Trustee, establish
and communicate to the Trustee in writing a target percentage
and drift allowance for such short-term/liquid investments.
The Trustee is responsible for ensuring that the actual cash
held in the Stock Fund falls within the agreed upon range over
time. Each participant's proportional interest in the 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 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 Stock Fund. The NAV shall be adjusted by
dividends paid on the shares of Sponsor Stock held in the
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 Stock Fund. Dividends received by the Stock Fund
are reinvested in additional shares of Sponsor Stock.
Investments in Sponsor Stock shalt 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. The Trustee shall maintain records sufficient to
limit transfers among each participant's investment options,
so that no participant may make contributions to, or effect a
transfer into, the Stock Fund in an amount sufficient to cause
such participant's investment in the Stock Fund, immediately
after giving effect to such contribution or transfer, to
exceed 25% of such participant's total investments in all
funds maintained in such participant's name in this Trust by
the Trustee; and provided further, contributions may continue
to be made, in an amount not to exceed
2
<PAGE>
25% of such contributions, notwithstanding that the value of a
participant's Stock Fund exceeds 25% of such participant's
account value.
(ii) FIDUCIARY DUTY OF NAMED FIDUCIARY. The Named
Fiduciary 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 acquiring and
holding Sponsor Stock. The Trustee shall not be liable for any
loss or expense which arises from the directions of the Named
Fiduciary 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 this Agreement.
(iii) Purchase and sales of Sponsor Stock shall be made
on the open market as necessary to maintain the target cash
percentage and drift allowance for the Stock Fund, provided
that:
(A) 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
(B) 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, then the Trustee shall purchase or sell such
shares as soon as possible thereafter. The Trustee may
follow directions from the Administrator or Named
Fiduciary to deviate from the above purchase and sale
procedures provided that such direction is made in
writing by the Administrator or Named Fiduciary.
(iv) EXECUTION OF PURCHASES AND SALES. (A) Purchases and
sales of units in the Stock Fund (other than for exchanges)
shall be made on the date on which the Trustee receives from
the Administrator in good order all information,
documentation, and wire transfers of funds (if applicable),
necessary to accurately effect such transactions. Exchanges of
units in the Stock Fund shall be made in accordance with the
Exchange Guidelines attached hereto as Schedule "H". The
Trustee may follow directions from the Administrator or Named
Fiduciary to deviate from the above purchase and sale
procedures provided that such direction is made in writing by
the Administrator or Named Fiduciary.
(B) PURCHASES AND SALES FROM OR TO SPONSOR. If
directed by the Sponsor in writing prior to the trading
date, the Trustee may purchase or sell Sponsor Stock
from or to the Sponsor if the purchase or sale is for
adequate consideration (within the meaning of section
3(18) of ERISA) and no commission is charged. If Sponsor
contributions (employer) or contributions made by the
Sponsor on behalf of the participants (employee) under
the Plan are to be invested in Sponsor Stock, the
Sponsor may transfer Sponsor Stock in lieu of cash to
the Trust. In either case, the number of shares to be
transferred will be determined by dividing the total
amount of Sponsor Stock to be purchased or sold by the
NYSE closing price of the Sponsor Stock on the trading
date.
3
<PAGE>
(C) USE OF AN AFFILIATED BROKER. The Sponsor
hereby directs the Trustee to use Fidelity Capital
Markets ("Capital Markets") to provide brokerage
services in connection with any purchase or sale of
Sponsor Stock in accordance with directions from Plan
participants. Capital Markets 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 Capital Markets shall
be entitled to remuneration under this direction
provision in an amount of no more than three and
one-fifth cents ($.032) 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) The Trustee will provide the Sponsor
with a description of Capital Markets' brokerage
placement practices and a form by which the Sponsor may
terminate this direction to use a broker affiliated with
the Trustee. The Trustee will provide the Sponsor with
this termination form annually, as well as quarterly and
annual reports which summarize all securities
transaction-related charges incurred by the Plan.
(3) Any successor organization of Capital
Markets, through reorganization, consolidation, merger
or similar transactions, shall, upon consummation of
such transaction, become the successor broker in
accordance with the terms of this direction provision.
(4) The Trustee and Capital Markets shall
continue to rely on this direction provision until
notified to the contrary. The Sponsor reserves the right
to terminate this direction upon written notice to
Capital Markets (or its successor) and the Trustee, in
accordance with Section 11 of this Agreement.
(v) SECURITIES LAW REPORTS. The Named Fiduciary 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 or sales of Sponsor Stock
pending the filing of any report. The Trustee shall provide to
the Named Fiduciary such information on the Trust's ownership
of Sponsor Stock as the Named Fiduciary may reasonably request
in order to comply with Federal or state securities laws.
(vi) 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 shall provide and pay for all printing, mailing,
tabulation and other costs associated with the voting and
tendering of Sponsor Stock. The Trustee, after consultation
with the Sponsor, shall prepare the necessary documents
associated with the voting and tendering of sponsor stock.
(A) VOTING.
4
<PAGE>
(1) When the issuer of Sponsor Stock prepares for any
annual or special meeting, the Sponsor shall notify the
Trustee at least thirty (30) days in advance of the intended
record date and shall cause a copy of all proxy solicitation
materials to be sent to the Trustee. If requested by the
Trustee, the Sponsor shall certify to the Trustee that the
aforementioned materials represents the same information that
is distributed to shareholders of Sponsor Stock. Based on
these materials the Trustee shall prepare a voting instruction
form and shall provide a copy of 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 Stock Fund.
(2) Each participant with an interest in the Stock Fund
shall have the right 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 Stock Fund (both
vested and unvested). Directions from a participant to the
Trustee concernmg the voting of Sponsor Stock shall be
communicated in writing, or by such other means as is agreed
upon by the Trustee and the Sponsor. 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. Upon its receipt of the
directions, the Trustee shall vote the shares of Sponsor Stock
reflecting the participant's proportional interest in the
Stock Fund as directed by the participant. Except as otherwise
required by law, the Trustee shall not vote shares of Sponsor
Stock reflecting a participant's proportional interest in the
Stock Fund for which it has received no direction from the
participant.
(B) TENDER OFFERS.
(1) Upon commencement of a tender offer for any
securities held in the Trust that are Sponsor Stock, the
Sponsor shall timely notify the Trustee in advance of the
intended tender date and shall cause a copy of all materials
to be sent to the Trustee. The Sponsor shall certify to the
Trustee that the aforementioned materials represent the same
information distributed to shareholders of Sponsor Stock.
Based on these materials and after consultation with the
Sponsor the Trustee shall prepare a tender instruction form
and shall provide a copy of all tender materials to be sent to
each plan participant with an interest in the Stock Fund,
together with the foregoing tender instruction form, to be
returned to the Trustee or its designee. The tender
instruction form shall show the number of full and fractional
shares of Sponsor Stock that reflect the participants
proportional interest in the Stock Fund (both vested and
unvested).
(2) Each participant with an interest in the Stock Fund
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 Stock Fund
(both vested and unvested). Directions from a participant to
the Trustee concerning the tender
5
<PAGE>
of Sponsor Stock shall be communicated in writing, or by such
other means as is agreed upon by the Trustee and the Sponsor.
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. The Trustee shall tender or not tender shares of
Sponsor Stock as directed by the participant. Except as
otherwise required by law, the Trustee shall not tender shares
of Sponsor Stock reflecting a participant's proportional
interest in the Stock Fund for which it has received no
direction from the participant.
(3) 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 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. 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 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 investment option described in
Schedule "C".
(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 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.
(viii) CONVERSION. All provisions in this Section 4(h) shall
also apply to any securities received as a result of a conversion of
Sponsor Stock.
(4) Amending Section 4(g) by adding the following additional Trustee power and
authority:
(ix) To borrow funds from a bank not affiliated with the Trustee in order
to provide sufficient liquidity to process Plan transactions in a timely
fashion; provided that the cost of such borrowing shall be allocated in a
reasonable fashion to the investment fund(s) in need of liquidity.
6
<PAGE>
(5) Adding a new Section 14, Electronic Services, as follows, and renumbering
all subsequent subsections accordingly:
SECTION 14. ELECTRONIC SERVICES.
(a) The Trustee may provide communications and services via
electronic medium ("Electronic Services"), including, but not limited to,
Fidelity Plan Sponsor WebStation, Client Intranet, Client e-mail,
interactive software products or any other information provided in an
electronic format. The Sponsor, its agents and employees agree to keep
confidential and not publish, copy, broadcast, retransmit, reproduce,
commercially exploit or otherwise redisseminate the data, information,
software or services without the Trustee's written consent.
(b) The Sponsor shall be responsible for installing and maintaining
all Electronic Services on its computer network and/or Intranet upon
receipt in a manner so that the information provided via the Electronic
Service will appear in the same form and content as it appears on the form
of delivery, and for any programming required to accomplish the
installation. Materials provided for Plan Sponsor's intranet web sites
shall be installed by the Sponsor and shall be clearly identified as
originating from Fidelity. The Sponsor shall promptly remove Electronic
Services from its computer network and/or Intranet, or replace the
Electronic Service with an updated service provided by the Trustee, upon
written notification (including written notification via facsimile) by the
Trustee.
(c) All Electronic Services shall be provided to the Sponsor without
any express or implied legal warranties or acceptance of legal liability
by the Trustee relative to the use of material or Electronic Services by
the Sponsor. No rights are conveyed to any property, intellectual or
tangible, associated with the contents of the Electronic Services and
related material.
(d) To the extent that any Electronic Services utilize Internet
services to transport data or communications, the Trustee will take, and
Plan Sponsor agrees to follow, reasonable security precautions; however,
the Trustee disclaims any liability for interception of any such data or
communications. The Trustee shall not be responsible for, and makes no
warranties regarding access, speed or availability of Internet or network
services. The Trustee shall not be responsible for any loss or damage
related to or resulting from any changes or modifications to the
electronic material after delivering it to the Plan Sponsor.
(6) Amending the "investment options" portion of Schedules "A" and "C" by
adding the following:
Bank United Corp. Common Stock Fund
(7) Amending the "OTHER" Section of Schedule "A" to add the following:
o Change of Address by Telephone: The Trustee shall allow terminated
and retired participants to make address changes via Fidelity's
toll-free telephone service.
7
<PAGE>
o For terminated and retired participants with outstanding loans:
Fidelity shall provide to these participants a loan coupon book for
the purpose of scheduling and processing loan repayments.
o DE MINIMIS DISTRIBUTIONS: After a participant terminates employment
and is eligible for a distribution, Fidelity will determine whether
the vested account balance exceeds $5,000, exceeded $5,000 at any
prior distribution or in-service withdrawal date in the account
history at Fidelity, or exceeds $5,000 at the end of the warning
period (at least 30 days, but not more than 70 days, from the
determination date). If not, Fidelity will process a mandatory and
immediate cashout, subject only to the requirement to offer a
rollover opportunity. The $5,000 threshold will increase or decrease
as the IRS may from time to time amend this threshold in Internal
Revenue Code Section 411(a)(l1).
o ROLL-IN PROCESSING. The Trustee shall process the qualification of
rollover contributions to the Trust. The procedures for qualifying a
rollover are directed by the Sponsor and the Trustee shall accept or
deny each rollover based upon the Plan's written criteria and any
written guidelines provided by the Administrator and documented in
the Plan Administrative Manual, or, if none, as set forth below:
To process a rollover request the participant must obtain the
signature from the distributing plan, trustee or custodian, on
the designated form, certifying that the monies distributed
originally came from a qualified plan and have not been
commingled with any non-eligible money. If a signature cannot
be obtained a signed letter from the distributing plan,
trustee or custodian on it's Company letterhead will also be
acceptable.
Requests that do not meet the specified criteria will be
returned to the participant with further an explanation as to
why the request cannot be processed. If the Sponsor or the
Trustee determine that a request is not a valid rollover, the
full amount of the requested rollover will be distributed to
the participant.
(8) Amending Schedule "B" by adding the following:
In-Service Withdrawals by Phone: $20.00 per withdrawal.
o To the extent that assets are invested in Sponsor Stock, .10% of
such assets in the Trust, payable pro rata quarterly on the basis of
such assets as of the calendar quarter's last valuation date, with a
$35,000 annual maximum and a $10,000 annual minimum. Pursuant to
Section 13 of this Agreement, should more than 10% of the assets of
the Trust be invested in Sponsor Stock, the fees on this Schedule
"B" may become subject to revision.
(9) Amending Schedule "B" by restating the first bullet point as follows:
o Other Fees: separate charges for optional non-discrimination
testing, extraordinary expenses resulting from large numbers of
simultaneous manual
8
<PAGE>
transactions, from errors not caused by Fidelity, reports not contemplated
in this Agreement, or extraordinary and/or duplicative expenses associated
with electronic services. The Administrator may withdraw reasonable
administrative fees from the Trust by written direction to the Trustee.
(10) Amending and restating Schedule "G", Telephone Exchange Procedures, as
attached.
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.
BANK UNITED FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ SIG. ILLEGIBLE 6/25/99 By: SIG. ILLEGIBLE 6/25/99
Date Vice President Date
9
<PAGE>
SCHEDULE "G"
TELEPHONE EXCHANGE GUIDELINES
The following telephone exchange guidelines are currently employed by Fidelity
Institutional Retirement Services Company (FIRSCO).
Telephone exchange hours via a Fidelity Representative are 8:30 a.m. (ET) to
12:00 midnight (ET) on each business day. A "business day" is any day on which
the New York Stock Exchange ("NYSE") is open. The Voice Response System is
intended to be available virtually 24 hours each day and may be used to initiate
exchanges subject to the same tnne frames described below.
NOTE: The NYSE normal closing time is 4:00 p.m. (ET); in the event the NYSE
alters its closing time, all references below to 4:00 p.m. (ET), shall mean the
NYSE closing time as altered.
FIRSCO reserves the right to change these telephone exchange guidelines at its
discretion
EXCHANGES BETWEEN MUTUAL FUNDS
Participants may call on any business day to exchange between the mutual
funds. If the request is received before 4:00 p.m. (ET), it will receive
that day's trade date. Calls received after 4:00 p.m. (ET) will be
processed on a next day basis.
EXCHANGES BETWEEN BANK UNITED CORP. COMMON STOCK FUND AND MUTUAL FUNDS
Subject to the restrictions identified in Section 4(h)(i), Participants
may call on any business day to exchange between the mutual funds and the
Bank United Corp. Common Stock Fund. If the request is received before
4:00 p.m. (ET), it will receive that day's trade date. Calls received
after 4:00 p.m. (ET) will be processed on a next day basis.
EXCHANGE RESTRICTIONS
Investments in the Stock Fund will consist primarily of shares of Sponsor
Stock. However, in order to satisfy daily participant requests for
exchanges, loans and withdrawals, the Stock Fund will also hold cash or
other short-term liquid investments in an amount that has been agreed to
in writing by the Sponsor and the Trustee. The Trustee will be responsible
for ensuring that the percentage of these investments falls within the
agreed upon range over time. However, if there is insufficient liquidity
in the Sponsor Stock Fund to allow for such activity, the Trustee will
sell shares of Sponsor Stock in the open market. Exchange and redemption
transactions will be processed as soon as proceeds from the sale of
Sponsor Stock are received.
BANK UNITED
By /s/ SIG. ILLEGIBLE 6/25/99
Date
10
EXHIBIT 4.2
BANK UNITED OF TEXAS FSB
401(K) RETIREMENT SAVINGS PLAN
(AS AMENDED AND RESTATED EFFECTIVE JULY 1, 1995)
<PAGE>
TABLE OF CONTENTS
PAGE
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ARTICLE I - DEFINITIONS
1.1 Account........................................................I-4
1.2 Act............................................................I-4
1.3 Active Service.................................................I-4
1.4 Administrative Committee.......................................I-8
1.5 Affiliated Employer............................................I-8
1.6 Beneficiary....................................................I-8
1.7 Board..........................................................I-8
1.8 Code...........................................................I-8
1.9 Considered Compensation........................................I-8
1.10 Contribution...................................................I-9
1.11 Effective Date.................................................I-9
1.12 Employee.......................................................I-9
1.13 Employee Prior Plan Account...................................I-10
1.14 Employee Rollover Account.....................................I-10
1.15 Employer......................................................I-10
1.16 Employer Contributions Account................................I-10
1.17 Employer Nonforfeitable Contributions Account.................I-11
1.18 Entry Date....................................................I-11
1.19 Highly Compensated Employee...................................I-11
1.20 Leased Employee...............................................I-16
1.21 Matching Contribution.........................................I-16
1.22 Member........................................................I-16
1.23 Net Income....................................................I-16
1.24 Non-Highly Compensated Employee...............................I-17
1.25 Plan..........................................................I-17
1.26 Plan Sponsor..................................................I-17
1.27 Plan Year.....................................................I-17
1.28 Prior Plan....................................................I-17
1.29 Profit Sharing Contribution...................................I-17
1.30 Qualified Nonelective Contribution............................I-17
1.31 Rollover Contribution.........................................I-18
1.32 Salary Reduction Agreement....................................I-18
1.33 Salary Reduction Contribution.................................I-18
1.34 Total and Permanent Disability................................I-18
1.35 Transferred...................................................I-19
1.36 Trust Agreement...............................................I-19
1.37 Trustee.......................................................I-19
1.38 Trust Fund....................................................I-19
1.39 Valuation Date................................................I-19
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ARTICLE II - EMPLOYEES ELIGIBLE TO PARTICIPATE
2.1 Eligibility Requirements......................................II-1
2.2 Certification and Notice of Eligibility.......................II-2
2.3 Frozen Participation..........................................II-2
ARTICLE III - CONTRIBUTIONS
3.1 Salary Reduction Agreements for Salary Reduction
Contributions: .............................................III-2
3.2 Rollover Contributions.......................................III-6
3.3 Employer Contributions.......................................III-7
3.4 Composition of and Deadline for Payment of Employer
Contributions ...............................................III-24
3.5 Return of Contributions for Mistake, Disqualification or
Disallowance of Deduction....................................III-25
ARTICLE IV - PARTICIPATION
4.1 Periodic Certification by Employer............................IV-1
4.2 Allocation of Employer Contributions..........................IV-1
4.3 Limitation on Additions to Account............................IV-3
4.4 Periodic Valuation of Trust Fund.............................IV-12
4.5 Extraordinary Valuation of Trust Fund........................IV-13
4.6 Forfeitures and Allocation Thereof...........................IV-14
4.7 Effective Date of Allocations and Adjustments................IV-17
4.8 Accounting for Transferred Member............................IV-17
4.9 No Vesting Unless Otherwise Prescribed.......................IV-18
4.10 Members' Investment Elections................................IV-18
4.11 Special Transition Rule......................................IV-22
ARTICLE V - RETIREMENT
5.1 Normal Retirement..............................................V-1
5.2 Late Retirement................................................V-1
5.3 Rights of Members and Prohibition of Unauthorized
Distribution...................................................V-1
ARTICLE VI - DISTRIBUTION OF BENEFITS
6.1 Death Benefit.................................................VI-1
6.2 Retirement Benefit............................................VI-3
6.3 Total and Permanent Disability Benefit........................VI-3
6.4 Severance Benefit.............................................VI-4
6.5 Accounting for Distributions; Offsets in Special CircumstancesVI-4
6.6 Distributions-Settlement Options..............................VI-5
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6.7 Lost Members or Beneficiaries; Escheat.......................VI-18
6.8 Withdrawals by Members.......................................VI-19
6.9 Claims Procedure for Benefits................................VI-22
6.10 Loans to Members and Beneficiaries...........................VI-23
6.11 Distributions to Divorced Spouse.............................VI-28
6.12 Special Transition Rule......................................VI-28
ARTICLE VII - TOP-HEAVY PLAN PROVISIONS
7.1 General Rules for Determining Top-Heavy Status...............VII-1
7.2 Computation of Present Value of Accrued Benefits.............VII-2
7.3 Special Rules for Plan Years that Plan is Top-Heavy..........VII-4
7.4 Definitions..................................................VII-6
ARTICLE VIII - ADMINISTRATIVE COMMITTEE
8.1 Appointment, Term of Service and Removal....................VIII-1
8.2 Powers......................................................VIII-1
8.3 Organization................................................VIII-2
8.4 Quorum and Majority Action..................................VIII-3
8.5 Signatures..................................................VIII-3
8.6 Disqualification of Committee Member........................VIII-3
8.7 Disclosure to Members.......................................VIII-3
8.8 Standard of Performance.....................................VIII-3
8.9 Liability of Committee and Liability Insurance..............VIII-4
8.10 Exemption from Bond.........................................VIII-4
8.11 No Compensation.............................................VIII-4
8.12 Persons Serving in Dual Fiduciary Roles.....................VIII-4
8.13 Administrator...............................................VIII-4
8.14 Payment of Expenses.........................................VIII-5
8.15 Indemnification of Members of Administrative Committee......VIII-5
ARTICLE IX - ADOPTION OF PLAN BY OTHER EMPLOYERS
9.1 Adoption Procedure............................................IX-1
9.2 No Joint Venture Implied......................................IX-1
9.3 Transfer of Members...........................................IX-2
ARTICLE X - AMENDMENT AND TERMINATION
10.1 Right to Amend and Limitations Thereon.........................X-1
10.2 Mandatory Amendments...........................................X-2
10.3 Withdrawal of an Employer......................................X-2
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10.4 Voluntary and Involuntary Termination..........................X-3
10.5 Vesting Upon Discontinuance of Employer Contributions,
Total or Partial Termination...................................X-5
10.6 Continuance Permitted Upon Sale or Transfer of Assets..........X-6
10.7 Requirement on Merger, Transfer, etc...........................X-6
ARTICLE XI - MISCELLANEOUS
11.1 Plan Not An Employment Contract...............................XI-1
11.2 Benefits Provided Solely From Trust Fund......................XI-1
11.3 Spendthrift Provision.........................................XI-1
11.4 Gender, Tense and Headings....................................XI-2
11.5 General Transition Rules Relating to Amendment, Restatement
and Continuation of Plan......................................XI-2
11.6 Severability..................................................XI-3
11.7 Governing Law; Parties to Legal Actions.......................XI-3
11.8 Notices.......................................................XI-3
11.9 Counterparts..................................................XI-4
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<PAGE>
BANK UNITED OF TEXAS FSB
401(K) RETIREMENT SAVINGS PLAN
(AS AMENDED AND RESTATED EFFECTIVE JULY 1, 1995)
W I T N E S S E T H:
WHEREAS, effective January 1, 1974, the Board of Directors of United
Financial Group, Inc. (then named Southwestern Group Investors, Inc.) adopted
the Southwestern Group Investors Employees' Savings Plan; and
WHEREAS, effective January 1, 1976, the Board of Directors of United
Financial Group, Inc. (then named Southwestern Group Investors Financial, Inc.)
amended, restated and continued the above described savings plan (i) to become
known as the Southwestern Group Financial Elective Plan and Trust and (ii) to
ensure continued qualification of such plan and exemption of such trust under
applicable provisions of the Internal Revenue Code of 1954, as amended (the
"Predecessor Code") and to comply with applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"); and
WHEREAS, the Southwestern Group Financial Elective Plan and Trust was
subsequently amended from time to time and, effective January 1, 1979, was
completely amended, restated and continued in order to ensure continued
qualification of such plan and exemption of such trust under then current
interpretations of applicable provisions of the Predecessor Code and ERISA; and
WHEREAS, the amended and restated Southwestern Group Financial Elective
Plan and Trust was amended four times subsequent to its January 1, 1979
effective date in order to effect technical changes for the benefit of
participants and beneficiaries thereunder and in order to reflect United
Financial Group, Inc. as the sponsor of such plan and trust which was known as
the United Financial Group, Inc. Elective Plan and Trust (the "Prior Plan"); and
WHEREAS, effective July 1, 1983, the Prior Plan was completely amended,
restated and continued (without a gap or lapse in coverage, time or effect of a
qualified plan and exempt trust under applicable provisions of the Predecessor
Code) under the form of the plan and trust known as the United Financial Group,
Inc. Employees' Tax Deferred Savings Plan and Trust (the "Plan"); and
WHEREAS, effective January 1, 1984, it was determined that said Plan
should be completely amended, restated and continued without a gap or lapse in
coverage, time or effect of a qualified plan and exempt trust under applicable
provisions of the Predecessor Code in order (i) to effect numerous technical
changes for the benefit of eligible employees and beneficiaries thereof, and
(ii) to ensure that the terms and provisions of the Plan continued to meet the
requirements for qualification and exemption under applicable provisions of the
Predecessor Code and to comply with applicable provisions of ERISA following
amendment of the Predecessor Code and ERISA by the Tax Equity
::ODMA\PCDOCS\HOUSTON\998884\1
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and Fiscal Responsibility Act of 1982, the Tax Reform Act of 1984 and the
Retirement Equity Act of 1984; and
WHEREAS, effective January 1, 1985, it was determined that said Plan
should be completely amended, restated and continued without a gap or lapse in
coverage, time or effect of a qualified plan and exempt trust under applicable
provisions of the Predecessor Code in order (i) to effect numerous technical
changes for the benefit of eligible employees and beneficiaries thereof, and
(ii) to ensure that the terms and provisions of the Plan continued to meet the
requirements for qualification and exemption under applicable provisions of the
Predecessor Code and to comply with applicable provisions of ERISA; and
WHEREAS, the Plan was amended effective February 11, 1988 in order to
reflect United Savings Association of Texas as the new sponsor of the Plan,
replacing United
Financial Group, Inc.;
and
WHEREAS, effective December 30, 1988, United Savings Association of Texas
FSB (the "Plan Sponsor") acquired all of the assets of United Savings
Association of Texas; and
WHEREAS, effective January 1, 1989 except as otherwise noted under certain
terms and provisions of the Plan, said Plan was assumed and continued by the
Plan Sponsor and was completely amended, restated and continued without a gap of
lapse in coverage, time or effect of a qualified plan and exempt trust under
applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Code") in order (i) to reflect the change in Plan Sponsor, a change in the
percentage of matching contributions made under the Plan, and the addition of a
discretionary profit sharing feature, (ii) to effect technical changes for the
benefit of eligible employees and beneficiaries thereof, and (iii) to ensure
that the terms and provisions of the Plan continued to meet the requirements for
qualification and exemption under applicable provisions of the Code and to
comply with applicable provisions of ERISA following amendment of the Code and
ERISA by the Tax Reform Act of 1986 and subsequent federal tax acts; and
WHEREAS, it is intended that the benefits offered under the Plan embodied
herein will help retain and attract the highest quality employees by providing
additional financial incentives and financial security for eligible employees
and their beneficiaries; and
WHEREAS, it was determined that the Plan be completely amended, restated
and continued without a gap or lapse in coverage, time or effect of a qualified
plan and exempt trust under applicable provisions of the Code effective as of
January 1, 1989, except as otherwise noted under certain terms or provisions of
the Plan, in order to (i) reflect various changes necessitated by the change in
Trustee from Texas Commerce Bank National Association to Fidelity Management
Trust Company, (ii) to change the service eligibility requirement for employees
hired after June 30, 1991, (iii) to effect certain other changes for the benefit
of eligible employees and their beneficiaries, and (iv) to ensure that the terms
and provisions of the Plan continue to meet the requirements for
::ODMA\PCDOCS\HOUSTON\998884\1
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qualification and exemption under applicable provisions of the Code and to
comply with applicable provisions of ERISA; and
WHEREAS, it has been determined that the Plan should again be amended,
restated and continued without a gap or lapse in coverage, time or effect of a
qualified plan and exempt trust under applicable provisions of the Code
effective as of January 1, 1989, except as otherwise noted under certain terms
and provisions of the Plan, in order to (i) reflect the change of the name of
the Plan Sponsor from United Savings Association of Texas FSB to Bank United of
Texas FSB, (ii) change the name of the Plan from the United Savings Association
of Texas FSB Employees' Tax Deferred Savings Plan to the Bank United of Texas
FSB 401(k) Retirement Savings Plan, (iii) add provisions to allow Members to
receive loans from the Plan and (iv) update the Plan for changes required as the
result of the issuance of final Income Tax Regulations under Sections 401(a)(4),
410(b), 401(a)(17), and 414(5) of the Code and Sections 401(k), 401(m), 411(d)
and 415 of the Code; and
WHEREAS, it has been determined that the Plan should again be amended,
restated and continued without a gap or lapse in coverage, time or effect of a
qualified plan and exempt trust under applicable provisions of the Code,
effective as of July 1, 1995 except as otherwise noted under certain terms and
provisions of the Plan, in order to (i) incorporate miscellaneous changes
necessitated by additional telephone services implemented effective as of
November 15, 1995 which obviate the need for written forms regarding Members'
enrollments, Salary Reduction Agreements and loan applications, (ii) effective
as of July 1, 1995, to increase the maximum permitted Salary Reduction
Contribution percentage from 12% to 15%, and (iii) effective as of July 1, 1995,
to adjust the Matching Contribution formula;
NOW, THEREFORE, the parties hereto hereby enter into this agreement as a
complete amendment, restatement and continuation of the Plan without a gap or
lapse in coverage, time or effect of a qualified plan and exempt trust under
applicable provisions of the Code:
[This space intentionally has been left blank]
::ODMA\PCDOCS\HOUSTON\998884\1
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ARTICLE I
DEFINITIONS
As used herein, the words and phrases set forth below shall have the
meaning next below attributed to them unless the context in which any such word
or phrase appears reasonably requires a broader, narrower or different meaning:
1.1 ACCOUNT: "Account" shall mean, with respect to a Member, all of the
ledger accounts (including subaccounts) maintained by the Administrative
Committee to set out such Member's proportionate interest in the Trust Fund,
which shall include an Employer Nonforfeitable Contributions Account and an
Employer Contributions Account and, as applicable, an Employee Prior Plan
Account and an Employee Rollover Account.
1.2 ACT: "Act" shall mean the Employee Retirement Income Security Act of
1974, as amended, and regulations and other authority issued thereunder by the
appropriate governmental authority. Reference to any section of the Act shall
include reference to any successor section or provision of the Act.
1.3 ACTIVE SERVICE: "Active Service" shall mean subject to the transition
rules set out in the last paragraph of this Section, as to any Employee, the
number of whole years and complete months of the Employee's period(s) of service
with any Employer or Affiliated Employer, whether or not such period(s) of
service were completed consecutively, determined in accordance with the
provisions of this Section.
Subject to subsequent provisions of this Section relating to service with
a predecessor employer and service credited under a Prior Plan, for purposes of
determining vesting credit under Section 6.4, a Member shall not be credited
with Active Service for (i) any period of service occurring prior to the
effective date of the adoption of the Plan by the Employer, or (ii) any period
of service occurring prior to such Member having attained the age of eighteen
(18) years. Additionally, a Member shall not be credited with Active Service for
any period of service prior to January 1, 1985 during which the Member declined
to authorize Salary Reduction Contributions on his behalf of at least one
percent (1%) of his Considered Compensation.
Except as otherwise provided below, in determining the number of whole
years and complete months of an Employee's period of service, non-successive
periods of service shall be aggregated, and less than whole year periods of
service (whether or not consecutive) shall be aggregated on the basis that
twelve complete months of service (thirty days shall be deemed to be a complete
month in the case of aggregation of fractional months) equal a whole year of
Active Service.
If an Employee severs from service by reason of a quit, discharge, or
retirement, and the Employee then performs an hour of service within twelve
months of the severance from service date, such Employee's period of severance
shall be deemed to have been a period of service. If an
::ODMA\PCDOCS\HOUSTON\998884\1
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Employee severs from service by reason of a quit, discharge, or retirement
during an absence from service for any reason other than a quit, discharge, or
retirement, and then performs an hour of service within twelve months of the
date on which the Employee was first absent from service, such Employee's period
of severance shall be deemed to have been a period of service.
Periods of severance taken into account as periods of service shall not be
taken into account for purposes of determining whether an Employee is in the
employ of the Employer for purposes of allocating Employer Contributions in
accordance with Section 4.2.
All service with any Affiliated Employer shall be deemed to be service
with the Employer. Furthermore, all covered service and contiguous noncovered
service with an Employer which has adopted the Plan but which is not an
Affiliated Employer shall be deemed to be service with the Employer.
In addition, pursuant to uniform and nondiscriminatory rules established
by the Administrative Committee with the consent or approval of the Board, the
Administrative Committee may vote to allow Employees to be credited with Active
Service for eligibility or vesting with respect to periods of service which
would otherwise be disregarded under the Plan. Any such decision shall be
evidenced by formal minutes reflecting such action of the Administrative
Committee, or by unanimous written consent of the members of the Administrative
Committee, and must be approved or ratified by the Board, unless pursuant to the
rules described in the preceding sentence, approval or ratification by the Board
is not required. Any such decision shall be appropriately communicated to the
affected Members.
If a Member has a balance in his Employer Contributions Account at the
time he incurs a one-year period of severance, and then such Member becomes
reemployed by the Employer, the period of service completed by such Member
before such period of severance shall not be taken into account for purposes of
determining the Member's vested percentage in his Employer Contributions Account
after such period of severance unless the Member completes a year of service
upon reemployment. With respect to Plan Years beginning after December 31, 1984,
in the case of an Employee who completes at least one hour of service under the
Plan on or after the first day of the Plan Year commencing after December 31,
1984, (i) if he has incurred five (or more) consecutive periods of severance,
the period of service completed after such period of severance shall not be
taken into account for purposes of determining the Member's vested percentage in
amounts credited to his Employer Contributions Account prior to such five (or
more) consecutive periods of severance, and (ii) if he does not have any vested
right under the Plan to Employer Contributions credited to his Account at the
time he incurs a period of five (or more) consecutive one year periods of
severance, the period of service completed by such Employee before such period
of severance shall not be taken into account for any reason when the period of
five (or more) consecutive periods of severance equals or exceeds his period of
service, whether or not consecutive, completed before such period of severance;
provided, however, in the case of an Employee who completes at least one hour of
service under the Plan on or after the first day of the Plan Year commencing
after December 31, 1984, any period of service which would have been disregarded
under the preceding sentence
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
as of the date immediately prior to the first day of the Plan Year commencing
after December 31, 1984, shall not be recognized under the Plan. In computing
the aggregate period of service prior to any such period of severance, any
periods of service which may be disregarded by reason of any prior period of
severance shall be disregarded.
Subject to the transition rules set out in the last paragraph of this
Section, a "period of service" shall mean a period of service with any Employer
or Affiliated Employer commencing on the Employee's employment commencement date
or reemployment commencement date, whichever is applicable, and ending on the
severance from service date. "Employment commencement date" and "reemployment
commencement date" shall mean, respectively, the dates on which the Employee
first performs an hour of service initially, and following a period of severance
not deemed to have been a period of service.
A "period of severance" shall mean the period of time commencing on the
severance from service date and ending on the date on which the Employee again
performs an hour of service. A "one year period of severance" shall mean a
12-consecutive-month period beginning on the severance from service date and
ending on the first anniversary of such date if the Employee does not perform an
hour of service during such 12-consecutive-month period; provided, however,
solely for purposes of determining whether an Employee has incurred a one year
period of severance, any Employee who is absent from employment with the
Employer or Affiliated Employer for a period of absence which either (1) begins
after the first day of the Plan Year beginning after December 31, 1984, and
which is incurred by reason of (i) the pregnancy of the Employee, (ii) the birth
of a child of the Employee, (iii) the placement of a child with the Employee in
connection with adoption of such child by the Employee or (iv) for purposes of
caring for such child for a period beginning immediately following such birth or
placement, or (2) begins on or after August 5, 1993, and to which the Employee
is entitled under the Family and Medical Leave Act of 1993 ("FMLA"), shall not
be charged with a period of severance with respect to (a) the
12-consecutive-month period beginning on the first day of such absence or (b)
the 12-consecutive-month period commencing on the first anniversary date of the
first day of the period described in clause (a) if the period in clause (a) is
included in the Employee's period of service. The applicable
12-consecutive-month period described in clause (a) or (b) shall be subtracted
from any period of severance which would otherwise include the period described
in clause (a) or (b), as applicable.
An Employee's "severance from service date" shall occur on the earlier of
(i) the date on which the Employee quits, retires, is discharged, or dies; or
(ii) the first anniversary of the first day of a period in which the Employee
remains absent from service (with or without pay) for any reason other than a
quit, retirement, discharge, or death, such as vacation, holiday, sickness,
disability, leave of absence, or layoff. In addition, any period of absence
which is not described in the preceding sentence, which begins on or after the
first day of the Plan Year beginning after December 31, 1984, and which is
incurred by reason of (i) the pregnancy of the Employee, (ii) the birth of a
child of the Employee, (iii) the placement of a child with the Employee in
connection with the adoption of such child by the Employee or (iv) for purposes
of caring for such child for a period beginning
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
immediately following such birth or placement, shall be deemed to be a period of
absence described in clause (ii) of the preceding sentence.
An "hour of service" shall mean an hour for which an Employee is paid, or
entitled to payment, for the performance of duties for any Employer or
Affiliated Employer. "Covered service" shall mean service within a job
classification or class of employees covered under the Plan. "Contiguous
noncovered service" shall mean service other than covered service, which
precedes or follows covered service, if no quit, discharge, or retirement occurs
between such covered service and such other service.
For purposes of determining the Active Service of a Member who was a
participant in and had an interest under the Prior Plan as of the date
immediately prior to the July 1, 1983 effective date, such Member shall be
credited with Active Service (for his period(s) of service prior to the July 1,
1983, effective date) equal to the service determined and credited to such
Member under applicable provisions of the Prior Plan as of the date immediately
prior to the July 1, 1983 effective date, provided, however, for purposes of
determining such Member's Active Service for the period(s) of service commencing
on or after the July 1, 1983 effective date, such Member's Active Service shall
be determined using the methods set out under applicable provisions of this
Plan. If the Employer maintains the plan of a predecessor employer described in
Section 414(a)(1) of the Code, the Plan shall treat any Employee's service with
the predecessor employer as service with the Employer in accordance with Section
414(a)(1) of the Code; provided, however, if the Employer does not maintain the
plan of a predecessor employer, the Plan shall treat any Employee's service with
the predecessor employer as service with the Employer only to the extent
prescribed in Section 414(a)(2) of the Code. Employees who were participants
under the Houston First American Savings Association Retirement Plan shall be
credited under this Plan for all years and months of service credited thereto
under the Houston First American Savings Association Retirement Plan.
Notwithstanding any other provisions of the Plan to the contrary, the
provisions of this paragraph shall govern the method for determining and
crediting Active Service with respect to any Employee covered under any Prior
Plan. For purposes of determining the Active Service of a Member who was a
participant in and had an interest under a Prior Plan as of the date immediately
prior to the date that the Prior Plan was amended and continued under the form
of the Plan, such Member shall be credited with Active Service (for his
period(s) of service prior to the date that the Prior Plan was amended and
continued under the form of the Plan) equal to the service determined and
credited to such Member under applicable provisions of the Prior Plan as of the
date immediately prior to the date that the Prior Plan was amended and continued
under the form of the Plan. For purposes of determining such Member's Active
Service for the period(s) of service continuing or commencing on or after the
date that the Prior Plan was amended and continued under the form of the Plan,
such Member's Active Service shall be determined using the methods set out under
applicable provisions of the Plan, unless the Plan is retroactively effective as
of a date which occurs within a computation period of a Prior Plan (under which
service credit was determined with reference to computation periods and hours of
service credited thereto). In such event, Active Service shall be determined and
credited with respect to such computation period under applicable
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
provisions of the Prior Plan if necessary to ensure that a Member does not lose
service credit otherwise recognizable under the Prior Plan with respect to such
computation period, and then Active Service of any such Member for period(s) of
service continuing or commencing on or after the end of such computation period
shall be determined using the methods set out under applicable provisions of the
Plan.
1.4 ADMINISTRATIVE COMMITTEE: "Administrative Committee" shall mean the
committee appointed by the Board pursuant to Article VIII.
1.5 AFFILIATED EMPLOYER: "Affiliated Employer" shall mean an employer
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code), or which is a trade or business (whether
or not incorporated) which is under common control (within the meaning of
Section 414(c) of the Code), or which is a member of an affiliated service group
of employers (within the meaning of Section 414(m) of the Code), which related
group of corporations, businesses or employers includes the Employer; and any
other entity required to be aggregated with the Employer pursuant to regulations
under Section 414(o) of the Code.
1.6 BENEFICIARY: "Beneficiary" shall mean the person, the trust created
for the benefit of a person who is the natural object of the Member's bounty or
estate, whichever is designated by the Member to receive the benefits payable
hereunder upon his death.
1.7 BOARD: "Board" shall mean the Board of Directors (or equivalent
governing authority) of the Plan Sponsor.
1.8 CODE: "Code" shall mean the Internal Revenue Code of 1986, as amended,
and regulations and other authority issued thereunder by the appropriate
governmental authority. References to any section of the Code or the Income Tax
Regulations shall include reference to any successor section or provision of the
Code or Income Tax Regulations, as applicable.
1.9 CONSIDERED COMPENSATION: "Considered Compensation" shall mean,
(subject to the top-heavy rules under Section 7.3(b)), as to each Employee,
compensation received during the Plan Year by the Employee from the Employer
which is required to be reported as wages on the Employee's form W-2 (or its
successor) for federal income tax withholding purposes, but determined without
regard to any rules under the Code 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) of the
Code). For Plan Years commencing prior to January 1, 1995, Considered
Compensation shall be determined without regard to cash payments for (i) auto
allowances, (ii) educational assistance, (iii) spending credits generated under
the Employer's cafeteria plan (as described in Section 125 of the Code) and (iv)
referral fees. Considered Compensation shall also be determined before reduction
under a compensation deferral agreement under (i) the Plan or another plan
described in Section 401(k) or 408(k) of the Code, (ii) an annuity described in
Section 403(b) of the Code or (iii) an election under a cafeteria plan described
in
::ODMA\PCDOCS\HOUSTON\998884\1
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Section 125 of the Code. The definition of Considered Compensation as used
herein is intended to be reasonable, nondiscriminatory and not by design to
favor Highly Compensated Employees.
With respect to Plan Years commencing after December 31, 1988, Considered
Compensation in excess of the limit imposed under Section 401(a)(17) of the Code
for the Plan Year shall be disregarded, and the rules pertaining to treatment of
family members set out in the third paragraph of the definition of Highly
Compensated Employee shall apply, except that in applying such rules, the term
"family" shall include only the spouse and any lineal descendants of the
Employee who have not attained age 19 before the close of the applicable Plan
Year.
For Plan Years commencing on or after January 1, 1994, Considered
Compensation shall not exceed $150,000, as adjusted by the Commissioner for
increases in the cost of living in accordance with Section 401(a)(17) of the
Code. For purposes of this definition of "Considered Compensation", and for
purposes of the corresponding limitations on Considered Compensation in Sections
3.3(h); 3.3(j); 7.3(b); and 7.4(l) of the Plan, the following provisions shall
apply:
(a) 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 applicable
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; and
(b) If Considered Compensation for any prior determination period is
taken into account in determining an eligible Employee's benefits accruing
in the current Plan Year, the Considered Compensation for that prior
determination period is subject to the applicable compensation limit in
effect for that prior determination period.
1.10 CONTRIBUTION: "Contribution" shall mean, as to the Employer, the
amount which the Employer pays to the Trustee under the terms of the Plan, which
includes Salary Reduction Contributions, Matching Contributions, Profit Sharing
Contributions, and Qualified Nonelective Contributions.
1.11 EFFECTIVE DATE: "Effective Date" shall mean July 1, 1995, as to this
amendment, restatement and continuation of the Plan, except as otherwise noted
under certain terms or provisions of the Plan.
1.12 EMPLOYEE: "Employee" shall mean every person employed as a common law
employee by an Employer, including, in the case of a corporation, officers (but
excluding any director unless the director is also a salaried officer or other
common law employee). In accordance with the requirements of Section 414(n) of
the Code, any Leased Employee shall be treated as an Employee of the recipient
Employer, however, contributions or benefits provided by the Leasing
Organization (described in the definition of Leased Employee) which are
attributable to services
::ODMA\PCDOCS\HOUSTON\998884\1
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performed for the recipient Employer shall be treated as provided by the
recipient Employer. Provided that Leased Employees do not comprise more than 20
percent of the recipient's nonhighly compensated work force (described in
Section 414(n)(5)(C) of the Code), the preceding sentence shall not apply if
such Leased Employee is covered by a money purchase pension plan providing: (i)
an nonintegrated employer contribution rate of at least 10 percent of
compensation, (ii) immediate participation by each employee of the Leasing
Organization other than (a) employees who perform substantially all of their
services for the Leasing Organization and (b) any individual whose compensation
(as defined in Section 415(c)(3) of the Code, including also amounts contributed
pursuant to a salary reduction agreement which are excludable from the
individual's gross income under Section 125, Section 402(a)(8), Section 402(h)
or Section 403(b) of the Code) from the Leasing Organization in each Plan Year
during the 4-year period ending with the Plan Year is less than $1,000, and
(iii) full and immediate vesting.
1.13 EMPLOYEE PRIOR PLAN ACCOUNT: "Employee Prior Plan Account" shall mean
the account maintained for each Member who was a participant in the Plan as of
July 1, 1983 which reflects the Member's (i) accrued benefit under the Plan (as
of July 1, 1983) attributable to any after-tax, employee contributions and (ii)
amounts attributable to Rollover Contributions made under the Plan by July 1,
1983, and the appreciation or depreciation and income or loss incurred by the
Trust Fund allocated to that account.
1.14 EMPLOYEE ROLLOVER ACCOUNT: "Employee Rollover Account" shall mean the
account maintained for a Member which reflects the Member's Rollover
Contributions, if any, made under the Plan, and the appreciation or depreciation
and income or loss incurred by the Trust Fund allocated to that account.
1.15 EMPLOYER: "Employer" shall mean the Plan Sponsor and any other person
(described in Section 7701(a) of the Code) which adopts the Plan in accordance
with applicable provisions thereof.
1.16 EMPLOYER CONTRIBUTIONS ACCOUNT: "Employer Contributions Account"
shall mean the account maintained for each Member which separately reflects (i)
any Matching Contributions allocated on the Member's behalf and the portion of
any Profit Sharing Contributions which were made on the Member's behalf and not
specifically designated (in resolutions adopted by the Board) as allocable to
the Employer Nonforfeitable Contributions Account and (ii) with respect to any
Member who was a participant in the Plan as of July 1, 1983, such Member's
accrued benefit (as of July 1, 1983) attributable to Employer Contributions that
were made on behalf of such Member under the Plan, and the appreciation or
depreciation and income or loss incurred by the Trust Fund allocated to such
account.
1.17 EMPLOYER NONFORFEITABLE CONTRIBUTIONS ACCOUNT: "Employer
Nonforfeitable Contributions Account" shall mean the account maintained for each
Member which separately reflects (i) any Salary Reduction Contributions that
were authorized by the Member and made by the Employer on behalf of the Member,
(ii) any Qualified Nonelective Contributions that were made
::ODMA\PCDOCS\HOUSTON\998884\1
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by the Employer on behalf of the Member in order to satisfy the actual deferral
percentage test or actual contributions test under Section 3.3, (iii) the
portion of any Profit Sharing Contributions that were made by the Employer on
the Member's behalf and designated (in resolutions adopted by the Board) as
allocable to the Employer Nonforfeitable Contributions Account, and (iv) any
initial onepercent matching contributions that were made by the Employer on the
Member's behalf under the Plan prior to April 1, 1989, and the appreciation or
depreciation and income or loss incurred by the Trust Fund allocated to such
account.
1.18 ENTRY DATE: "Entry Date" shall mean the date on which an Employee
becomes a Member by commencing participation in the Plan after having met the
eligibility requirements under applicable provisions of the Plan, which date
shall mean the first payroll coincident with or next following the Employee's
satisfaction of such eligibility requirements.
1.19 HIGHLY COMPENSATED EMPLOYEE: "Highly Compensated Employee" shall mean
(subject to the subsequent provisions hereof) any Employee, who during the Plan
Year for which the determination is being made (the "determination year") or
during the 12-month period immediately preceding the Plan Year (the "look-back
year"):
(a) was at any time a 5-percent owner (as defined in Section
416(i)(1) of the Code
and Section 7.4),
(b) received compensation (described below) from the Employer in
excess of $75,000 (as adjusted at such time and in such manner as may be
prescribed under Section 414(q) and Section 415(d) of the Code),
(c) received compensation from the Employer in excess of $50,000 (as
adjusted at such time and in such manner as may be prescribed under
Section 414(q) and Section 415(d) of the Code), and was in the top-paid
group of Employees consisting of the top 20- percent of the Employees when
ranked on the basis of compensation paid during such year, excluding,
however, for purposes of determining the number (but, except for Employees
covered by collective bargaining agreements described below, not identity)
of Employees which comprise such top-paid group of Employees, (a) any
Employee who has not completed six months of service as of the end of the
current year after aggregating the Employee's service for the Employer
during the current year and the immediately preceding year, (b) any
Employee who normally works less than 17-1/2 hours per week for 50% or
more of the total weeks worked during such year (excluding weeks during
which an Employee did not work for the Employer), (c) any Employee who
normally works during not more than six months during any year (an
Employee who works on one day during a month is deemed to have worked
during that month), (d) any Employee who has not attained age 21 as of the
end of the applicable year, and (e) except to the extent provided in
regulations issued under Section 414(q) of the Code by the appropriate
governmental authority, any Employee who is included in a unit of
Employees covered by an agreement which the Secretary of Labor finds to be
a collective bargaining agreement between
::ODMA\PCDOCS\HOUSTON\998884\1
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Employee representatives and the Employer, if at least 90 percent of the
Employees of the Employer are covered under one or more such collective
bargaining agreements and the Plan does not cover any Employee who is
covered by any such collective bargaining agreement.
(d) was at any time an officer (within the meaning of Section 416(i)
of the Code) and received compensation greater than 50-percent of the
dollar amount in effect under Section 415(b)(1)(A) of the Code for the
calendar year in which the determination year or look-back year begins.
With respect to the exclusions for Employees who normally work less than 17 1/2
hours per week or during not more than six months during any year (as described
in clauses (iii)(b) and (iii)(c), respectively, above), such exclusion
determinations may be made separately with respect to each Employee, or on the
basis of groups of Employees who fall within particular job categories as
established by the Employer on a reasonable and consistent basis. For purposes
of clause (iii)(b) above, the Employer may exclude Employees who are members of
a particular job category if (i) 80% of the positions within that job category
are filled by Employees who normally work less than 17 1/2 hours per week, or
(ii) the median number of hours of service credited to Employees in that job
category during a determination year or look-back year, as the case may be, is
less than or equal to 500. Any Employee who is a non-resident alien who receives
no earned income (within the meaning of Section 911(d)(2) of the Code) from the
Employer which constitutes income from sources within the United States (within
the meaning of Section 861(a)(3) of the Code) shall not be treated as an
Employee for the purpose of determining whether an Employee is a Highly
Compensated Employee or a Non-Highly Compensated Employee.
An Employee shall not be treated as described in clause (ii), (iii) or
(iv) of the first paragraph for the determination year unless such Employee is
also a member of the group consisting of the 100 Employees paid the greatest
compensation (described below) during the determination year. For purposes of
clause (iv) of the first paragraph, without regard to any exclusions applicable
for purposes of determining the number of Employees in the top-paid group of
Employees, no more than 50 Employees (or, if lesser, the greater of (a) three
Employees who perform services during the determination or look-back year or (b)
10% of such Employees) shall be treated as officers with respect to the
determination year or the look-back year, whichever may be applicable. Provided,
however, that if for either such year the number of officers of the Employer who
satisfy the requirements of clause (iv) of the first paragraph (as limited by
the first sentence of this paragraph) exceeds the 50-Employee limitation of the
immediately preceding sentence, then the officers who receive the greatest
compensation during the determination year or look-back year will be considered
includible officers; and, further provided, that if for any such year, no
officer of the Employer is described in clause (iv) of the first paragraph, the
highest paid officer of the Employer for such year (without regard to the amount
of compensation paid to such officer in relation to the dollar limit of Section
415(c)(1)(A) of the Code for the year) shall be treated as described in such
clause (iv) whether or not such Employee is also a Highly Compensated Employee
on any other basis. An individual who is a Highly Compensated Employee for the
determination year or the look-back year
::ODMA\PCDOCS\HOUSTON\998884\1
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by reason of being described in two or more of clauses (i) through (iv) of the
first sentence of the immediately preceding paragraph shall not be disregarded
in determining whether another individual is a Highly Compensated Employee. The
Administrative Committee shall prescribe reasonable and nondiscriminatory rules
which shall be uniformly and consistently applied for the purposes of (i)
rounding calculations incident to determining the number of Employees in the
top-paid group of Employees and (ii) breaking ties among two or more Employees
incident to identifying particular Employees who are in the top-paid group of
Employees, who are among the top-10 Highly Compensated Employees, or who are
among the 100 Employees paid the greatest compensation during the determination
year.
If, on any single day during any determination year or look-back year, an
Employee is a member of the family (described below) of another individual who
is (i) a 5-percent owner who is a current or former Employee or (ii) a Highly
Compensated Employee (including former Employees) in the group consisting of the
10 Highly Compensated Employees paid the greatest compensation during the
determination year or the look-back year, then such family member and 5-percent
owner or top-10 Highly Compensated Employee shall be considered to be a single
Employee receiving an amount of compensation and a Plan contribution that is
based on the compensation and Plan contribution attributable to such family
member and the 5-percent owner or top-10 Highly Compensated Employee. For
purposes of the immediately preceding sentence, family members of any Employee
or former Employee include the Employee's or former Employee's spouse and lineal
ascendants or descendants and the spouses of lineal ascendants and descendants.
Family members are subject to the aggregation rule described in the second
preceding sentence whether or not (i) they fall within the categories of
Employees that may be excluded for purposes of determining the number of
Employees in the top-paid group consisting of the top 20-percent of the
Employees when ranked on the basis of compensation (as such top-paid group is
described in clause (iii) of the first paragraph hereof), or (ii) they are
Highly Compensated Employees when considered separately.
A former Employee who, with respect to the Employer, had a "separation
year" (described below) or a "deemed separation year" (described below) prior to
the determination year will be treated as a Highly Compensated Employee for the
determination year if such former Employee was (i) a Highly Compensated Employee
for such former Employee's separation year or deemed separation year, or (ii) a
Highly Compensated Employee for any determination year ending on or after such
former Employee attained age 55. For purposes of the immediately preceding
sentence, an Employee who performs no services for the Employer during a
determination year (including a leave of absence throughout the determination
year) is treated as a former Employee. A "separation year" is the determination
year during which the Employee separates from service with the Employer;
provided, however, an Employee who performs no services for the Employer during
a determination year will be treated as having separated from service with the
Employer in the year in which such Employee last performed services for the
Employer. An Employee who performs services for the Employer during a
determination year will incur a "deemed separation year" if, in any
determination year which ends prior to such Employee's attainment of age 55, the
Employee receives compensation in an amount less than 50% of the Employee's
average annual compensation for the three consecutive calendar years preceding
such determination year during which the
::ODMA\PCDOCS\HOUSTON\998884\1
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Employee received the greatest amount of compensation from the Employer;
provided, however, an Employee will not be treated as a Highly Compensated
Employee (solely by reason of a deemed separation in a deemed separation year),
if after such deemed separation and before the year of the Employee's actual
separation, such Employee's compensation increased sufficiently to permit the
Employee to be treated as having a deemed resumption of employment with respect
to a determination year, as prescribed in regulations issued under Section
414(q) of the Code by the appropriate governmental authority.
Former Employees are not counted for purposes of determining the top-paid
group consisting of the top 20-percent of the Employees when ranked on the basis
of compensation (as such top-paid group is described in clause (iii) of the
first paragraph hereof). Furthermore, with respect to the determination year,
former Employees are not included in (i) the group consisting of the 100
Employees paid the greatest compensation, or (ii) the group of includible
officers of the Employer, as such groups are described in the second paragraph
of this Section.
For purposes of this Section, "compensation" shall mean the wages (as
defined in Section 3401(a) of the Code for purposes of income tax withholding at
the source) that are paid (within the meaning of Section 1.415-2(d)(3) and (4)
of the Income Tax Regulations) to the Employee by the Employer during the Plan
Year for services performed and reportable on the Employee's form W-2 (or its
successor), 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) of the Code), but including elective or salary reduction
contributions to cafeteria plans under Section 125 of the Code, or to cash or
deferred arrangements under Sections 402(a)(8) and 402(h)(1)(B) of the Code, or
to tax-sheltered annuities under Section 403(b) of the Code. Only compensation
received by the Employee from an Employer, or deemed to be received pursuant to
the preceding sentence, shall be considered for purposes of this Section;
therefore, compensation shall not be annualized in order to compute an
Employee's compensation in the determination year or the look-back year.
The rules of Section 414(b), (c), (m), (n) and (o) of the Code shall be
applied before the above provisions of this Section are applied. The rules
described in the immediately preceding sentence do not apply for purposes of
determining who is a 5-percent owner. Notwithstanding any provision hereof to
the contrary, the determination of who is a Highly Compensated Employee shall be
made in accordance with Section 414(q) of the Code.
In the event that the Administrative Committee elects to have one or more
of the provisions of this paragraph apply for purposes of determining the status
of an Employee as a Highly Compensated Employee or a Non-Highly Compensated
Employee, the Administrative Committee shall adopt a resolution which shall
specifically identify the provision or provisions of this paragraph which shall
apply and the effective date of such application, and a certified copy of such
resolution shall be attached to the Plan as an exhibit which shall be referenced
to this Section and shall be deemed to be an amendment of the Plan which is
incorporated in and made a part of this Section for all purposes of the Plan.
Any provision of this paragraph which becomes operative by virtue of
::ODMA\PCDOCS\HOUSTON\998884\1
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application of the preceding sentence shall override or supersede and control
over any provision of this Section which may be inconsistent with the operative
provisions of this paragraph. Accordingly, to the extent elected by the
Administrative Committee in compliance with the requirements of the first
sentence of this paragraph, the following provision or provisions shall apply:
(a) To the extent permitted in regulations issued under Section
414(q) of the Code, the look-back year calculation for a determination
year shall be made on the basis of the calendar year ending with or within
the applicable determination year (or, in the case of a determination year
that is shorter than twelve months, the calendar year ending with or
within the twelve month period ending with the end of the applicable
determination year); provided, however, the computation contemplated
hereunder shall apply only if the Administrative Committee elects, as
described above, to apply the same computation provisions to all plans,
entities and arrangements of the Employer which are required to apply the
definition of Highly Compensated Employee set forth in Section 414(q) of
the Code.
(b) To the extent permitted in regulations issued under Section
414(q) of the Code, Leased Employees covered under a qualified money
purchase pension plan maintained by a leasing organization and not covered
under a qualified retirement plan of the Employer (including the Plan),
shall be included for purposes of determining the group of Highly
Compensated Employees hereunder.
(c) To the extent permitted in regulations issued under Section
414(q) of the Code, the special definition (described in such regulations)
for purposes of determining whether former Employees who separated from
service with the Employer prior to January 1, 1987 are Highly Compensated
Employees shall apply; provided, however, the special definition
contemplated hereunder shall apply only if the Administrative Committee
elects, as described above, to apply the special definition to all plans,
entities and arrangements of the Employer which are required to apply the
definition of Highly Compensated Employee set forth in Section 414(q) of
the Code, and further, provided that such election to use such special
definition may not be changed by the Employer without the consent of the
Internal Revenue Service.
Subject to any governmental approval as may be required under applicable
regulations or other authority issued by the appropriate governmental authority,
any operative provision of this paragraph may be changed by attaching a
certified resolution of the Administrative Committee (which resolution shall be
attached to the Plan as an exhibit) which (i) shall identify the provision or
provisions of the paragraph that are to be changed and the effective date of
such change, (ii) shall be referenced to this Section, and (iii) shall be deemed
to be an amendment of the Plan which is incorporated in and made part of this
Section for all purposes of the Plan.
If elected by a resolution duly adopted by the Administrative Committee,
Section 1.19 shall be modified by:
::ODMA\PCDOCS\HOUSTON\998884\1
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(a) Substituting $50,000 for $75,000 in clause (ii) of the first
paragraph of Section 1.19 and by disregarding clause (iii) of the first
paragraph of Section 1.19. This simplified definition of Highly
Compensated Employee may apply if the Employer maintains significant
business activities (and employs employees) in at least two significantly
separate geographic areas; or
(b) Substituting the simplified method pursuant to Section 4 of
Revenue Procedure 93-42, in which case the Highly Compensated Employees
shall be determined under Section 1.19 on the basis of (a) the look-back
year and determination year or (b) the determination year only, as
determined by the Administrative Committee, taking into account all
Employees employed during such year.
1.20 LEASED EMPLOYEE: "Leased Employee" shall mean any person (i) who is
not a common law employee of the recipient Employer and (ii) who (pursuant to an
agreement between an Employer (or Affiliated Employer) and any other person
("Leasing Organization")) has performed services for the Employer (or for the
Employer and related persons determined in accordance with Section 414(n)(6) of
the Code) (a) on a substantially full time basis for a period of at least one
year (including periods of service for the recipient Employer for which such
person would have been a Leased Employee but for the requirements of this
subclause (a)) and (b) such services are of a type historically performed by
employees in the business field of the recipient Employer.
1.21 MATCHING CONTRIBUTION: "Matching Contribution" shall mean the amount
which the Employer pays to the Trustee to match Salary Reduction Contributions
made on behalf of Members in accordance with Section 3.3.
1.22 MEMBER: "Member" shall mean an Employee who is participating in the
Plan during the Plan Year and, if consistent with the context in which such term
is used, a former Member of the
Plan.
1.23 NET INCOME: "Net Income" shall mean, as to an Employer, its net
profit for any given year as determined by its accountant or accounting firm and
reflected on its profit and loss statement for such year, without reduction for
contributions under the Plan or payments of, or reserves for, federal and state
taxes based on income, and after elimination of all gains from the sale or
disposition of property not held for sale to customers in the ordinary course of
business.
1.24 NON-HIGHLY COMPENSATED EMPLOYEE: "Non-Highly Compensated
Employee" shall
mean a Employee who is neither a Highly Compensated Employee nor a family member
thereof described in Section 414(q)(6) of the Code.
1.25 PLAN: "Plan" shall mean the Bank United of Texas FSB 401(k)
Retirement Savings Plan herein set forth, and any subsequent amendments made
from time to time. With respect to Plan Years beginning after December 31, 1985,
regardless of whether contributions are made with respect to Net Income or
accumulated earnings and profits, the Plan is hereby designated as a profit
sharing plan for purposes of Sections 401, 402, 412 and 417 of the Code.
::ODMA\PCDOCS\HOUSTON\998884\1
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1.26 PLAN SPONSOR: "Plan Sponsor" shall mean Bank United of Texas FSB and
any successor thereto which adopts and continues the Plan.
1.27 PLAN YEAR: "Plan Year" shall mean the fiscal year of the Plan which
shall be a calendar year.
1.28 PRIOR PLAN: "Prior Plan" shall mean the United Financial Group, Inc.
Elective Plan and Trust which, effective July 1, 1983, was completely amended,
restated and continued under the form of this Plan. The term "Prior Plan" shall
also include any other defined contribution plan described in Section 414(i) of
the Code (excluding any plan that is subject to the minimum funding standards of
Section 412 of the Code or that is required to provide a qualified joint and
survivor annuity or a qualified preretirement survivor annuity described in
Sections 401(a)(11) and 417 of the Code), which plan at all times relevant met
the requirements for qualification under Section 401(a) or 403(a) of the Code as
in effect on the date immediately prior to the date that such plan was
completely amended, restated and continued under the form of the Plan, without a
gap or lapse in coverage, time or effect of a qualified plan and exempt trust
under applicable provisions of the Code.
1.29 PROFIT SHARING CONTRIBUTION: "Profit Sharing Contribution" shall mean
an Employer Contribution paid to the Trustee in the discretion of the Board
pursuant to Section 3.3(c) of the Plan.
1.30 QUALIFIED NONELECTIVE CONTRIBUTION: "Qualified Nonelective
Contribution" shall mean the amount, if any, which the Employer contributes to
the Trust on behalf of the Non-Highly Compensated Employees who are Members in
order to satisfy the actual deferral percentage test and/or the actual
contribution percentage test under Section 3.3. Qualified Nonelective
Contributions shall be allocated to the Member's Employer Nonforfeitable
Contributions Account and be subject to the same limitations on distribution
that apply to Salary Reduction Contributions under Section 401(k)(2) of the
Code.
1.31 ROLLOVER CONTRIBUTION: "Rollover Contribution" shall mean an amount
which the Administrative Committee determines may be deposited in the Trust Fund
in accordance with Section(s) 402(c), 402(e) or 408(d)(3) of the Code without
endangering the qualification and exemption of the Plan and the Trust under
Sections 401(a) and 501(a) of the Code, respectively.
1.32 SALARY REDUCTION AGREEMENT: "Salary Reduction Agreement" shall mean
an agreement between a current Employee who is a Member and the Employer in a
form satisfactory to the Administrative Committee to permit the Employer, in
lieu of paying such amounts to the Member in cash, to reduce such Member's
current Considered Compensation and contribute the amount of the reduction to
the Trust Fund as a Salary Reduction Contribution on the Member's behalf.
1.33 SALARY REDUCTION CONTRIBUTION: "Salary Reduction Contribution" shall
mean the amount of the Member's Considered Compensation (i) which the Employer
pays to the Trustee
::ODMA\PCDOCS\HOUSTON\998884\1
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pursuant to a Salary Reduction Agreement entered into by the Member in
accordance with Section 3.1 of the Plan and (ii) which is allocated and credited
to the Member's Employer Nonforfeitable Contributions Account pursuant to
applicable provisions of the Plan.
1.34 TOTAL AND PERMANENT DISABILITY: "Total and Permanent Disability"
shall mean an inability to engage in any substantially gainful activity by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months. The permanence and degree of such
impairment shall be determined by the Administrative Committee and such
determination shall be supported by medical evidence.
Such disability shall not be considered "total and permanent" for the
purposes of this Section if any of the following causative factors exist:
(a) Such disability was caused by or connected with chronic
alcoholism or addiction to narcotics;
(b) Such disability was contracted, suffered or incurred while such
Member was engaging in, or having engaged in, a felonious criminal act;
(c) Such disability resulted from an injury incurred while a member
of the armed forces of the United States after the effective date of this
Plan and for which such Member receives a military pension;
(d) Such disability was self-inflicted; or
(e) Such disability was an injury or disease sustained by an
Employee while working for other than an Employer.
1.35 TRANSFERRED: "Transferred" as used with respect to an Employee and
"Transfer of an Employee" shall mean the termination of employment with one
Employer and the contemporaneous commencement of employment with another
Employer.
1.36 TRUST AGREEMENT: "Trust Agreement" shall mean the agreement executed
by the Plan Sponsor and the Trustee which establishes the Trust Fund used to
fund the Plan.
1.37 TRUSTEE: "Trustee" shall mean the trustee qualified and acting under
the Trust Agreement or any successor appointed by the Board.
1.38 TRUST FUND: "Trust Fund" or "Trust" shall mean the trust estate
established pursuant to the Trust Agreement; in particular, the cash, bonds,
stock and other assets or liabilities held by the Trustee under the terms of the
Trust Agreement.
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1.39 VALUATION DATE: "Valuation Date" shall mean the date determined by
the Administrative Committee to apply with respect to the valuation of any
Account balance.
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ARTICLE II
EMPLOYEES ELIGIBLE TO PARTICIPATE
2.1 ELIGIBILITY REQUIREMENTS: Subject to compliance with applicable
provisions of Section 3.1, every Employee who was a Member or participant in a
Prior Plan on the date immediately prior to the date that such Prior Plan was
amended, restated and continued under the form of the Plan, shall be deemed to
be a Member hereunder as of the date that such Prior Plan was amended, restated
and continued under the form of the Plan.
Every other Employee shall be eligible to participate in the Plan
commencing on the Entry Date coincident with or next following the latest of (i)
the effective date of the adoption of the Plan by the Employee's Employer, or
(ii) the Employee's attainment of the age of twenty-one (21) years, or (iii) the
date on which the Employee first completes a six (6) month period of Active
Service or, with respect to Employees hired after June 30, 1991, a one (1) year
period of Active Service.
In addition, pursuant to uniform and nondiscriminatory rules established
by the Administrative Committee, the Administrative Committee may vote to allow
Employees to enter the Plan as Members on a date which would not otherwise be
permitted under the Plan. Any such decision shall be evidenced by formal minutes
reflecting such action of the Administrative Committee or by unanimous written
consent of the members of the Administrative Committee, shall be appropriately
communicated to the affected Members, and must be approved or ratified by the
Board, unless pursuant to the rules described in the preceding sentence,
approval or ratification by the Board is not required.
If an individual who satisfies the requirements for membership in the Plan
was separated from service with the Employer, but subsequently returns to active
employment with the Employer prior to incurring a period of five (or more)
consecutive periods of severance for eligibility, such person shall become a
Member of the Plan on the later of (i) the Entry Date on which such person would
otherwise initially be entitled to participate in the Plan or (ii) the date that
he ended the above-described period of separation from service. Upon an
individual's return to employment, (i) an Employee who had a vested and
nonforfeitable right to any portion of any amount credited to his Employer
Account at the time of his termination of employment and who incurred a period
of five (or more) consecutive periods of severance, or (ii) an Employee who had
no vested and nonforfeitable right to any amount credited to his Employer
Account at the time of his termination of employment and who has incurred a
period of five (or more) consecutive periods of severance, which period is less
than the aggregate number of years of Active Service for eligibility (whether or
not consecutive) completed prior to such period, shall be eligible to
participate in the Plan immediately as of his return to the employ of the
Employer. The immediately preceding sentence shall not apply in the case of an
Employee who completes at least one hour of service under the Plan or Prior Plan
on or after the Plan Year commencing after December 31, 1984 if the Employee's
prior period of Active Service would have been disregarded under the Plan or
Prior Plan as of the date immediately prior to the first day of the Plan Year
beginning after December 31, 1984. Except with respect to those situations
specifically described in the preceding provisions of this paragraph, upon
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
an individual's return to covered employment, he will be treated as a new
Employee for eligibility purposes.
Employees who are included in a unit of Employees covered by a collective
bargaining agreement between the Employees' representative and an Employer shall
be excluded from participation in the Plan if retirement benefits were the
subject of good faith bargaining between the Employees' representative and the
Employer and the agreement does not require the Employer to include such
Employees in the Plan. For purposes of the preceding sentence, the term
"Employees' representative" shall not include any organization more than
one-half of the members of which are Employees who are owners, officers or
executives of the Employer.
Employees who are nonresident aliens and who receive no earned income
(within the meaning of Section 911(d)(2) of the Code) from the Employer which
constitutes income from sources within the United States (within the meaning of
Section 861(a)(3) of the Code) shall be excluded from participation in the Plan.
Notwithstanding any other provision of the Plan to the contrary, (i) any
individual who was considered by the Employer to be an independent contractor,
but who is later reclassified as a common-law Employee (excluding any Leased
Employee described in clause (ii) below) of the Employer with respect to any
portion of the period in which such individual was paid by the Employer as an
independent contractor, or (ii) any Leased Employee, shall be excluded from
participation in the Plan with respect to the period in which any individual
described in clause (i) was considered to be an independent contractor, or the
period in which any individual described in clause (ii) is a Leased Employee.
The immediately preceding sentence shall fully apply only with respect to Plan
Years (or portions thereof) in which none of the individuals described in such
sentence is required to be covered in order to ensure that the Plan is operated
in compliance with the requirements of Sections 401(a) and 410(b) of the Code.
In the event that any individual who is included in the class of reclassified
independent contractors or Leased Employees described in clause (i) or (ii) of
the first sentence of this paragraph, must be covered with respect to a Plan
Year (or portion thereof) in order to ensure that the requirements of the
immediately preceding sentence are met, starting with the class of reclassified
independent contractors, only such number of individuals within the class which
includes the individual (beginning with the individuals with the lowest
Considered Compensation determined on an annualized basis) as is necessary to
ensure compliance with the requirements of the immediately preceding sentence
shall be covered in the Plan only for the Plan Year (or portion thereof) that is
necessary to ensure that the requirements of the immediately preceding sentence
are met.
2.2 CERTIFICATION AND NOTICE OF ELIGIBILITY: Eligibility shall be
determined and each Employee shall be notified of his admission as a Member by
the Administrative Committee.
2.3 FROZEN PARTICIPATION: While service with an Affiliated Employer which
is not an Employer is counted for purposes of determining Active Service, no
person shall authorize Salary Reduction Contributions to the Plan except for the
period(s) of service that he is actually employed
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
in covered employment with and paid by an Employer. If an Employee is (i)
transferred from an Employer to an Affiliated Employer which is not an Employer
or (ii) otherwise ceases to be employed in covered employment with and paid by
an Employer (but does not have a severance from service), his Account shall
thereupon be frozen: he shall not be permitted to authorize contributions to the
Plan, and his Account shall not share in the allocation of any Employer
Contribution or, if applicable, any forfeitures (except for the period(s) of
service that he is actually employed in covered employment with and paid by an
Employer), but his Account will continue to share in any appreciation or
depreciation and income or loss incurred by the Trust Fund during the period of
time that he is employed by an Affiliated Employer which is not an Employer or
that he is otherwise excluded from covered employment; provided, however, he
shall continue to accrue Active Service.
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
ARTICLE III
CONTRIBUTIONS
INDEX OF PLAN PROVISIONS COVERED IN ARTICLE III
SECTION OR SUBSECTION SECTION NUMBER
- --------------------- --------------
Salary Reduction Agreements for Salary Reduction 3.1
Contributions
Salary Reduction Agreements 3.1(a)
Special Salary Reduction Agreements 3.1(b)
Dollar Limit on Salary Reduction Contributions 3.1(c)
Remedying Excess Deferrals 3.1(d)
Rollover Contributions 3.2
Employer Contributions 3.3
Salary Reduction Contributions 3.3(a)
Matching Contributions 3.3(b)
Profit Sharing Contributions 3.3(c)
Qualified Nonelective Contributions 3.3(d)
Restoration of Forfeited Benefits 3.3(e)
Top-Heavy Minimum Contribution 3.3(f)
Contribution Limits 3.3(g)
Actual Deferral Percentage Test 3.3(h)
Excess Contributions over ADP Limits 3.3(i)
Actual Contribution Percentage Test 3.3(j)
Prohibited Multiple Use of 2.0/2%
Alternative Limit for the ADP and ACP tests 3.3(k)
Excess Aggregate Contributions over ACP Limits 3.3(l)
Composition of and Deadline for Payment of Employer
Contributions 3.4
Return of Contributions for Mistake, Disqualification
and Disallowance of Deduction 3.5
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
3.1 SALARY REDUCTION AGREEMENTS FOR SALARY REDUCTION CONTRIBUTIONS:
(a) SALARY REDUCTION AGREEMENTS: Subject to applicable conditions
and limitations of the Plan, at such times as permitted by the
Administrative Committee, and in such manner and amounts as shall be
consistent with the provisions of this Section, in lieu of receipt of such
amounts in cash, Members may authorize the Employer to make Salary
Reduction Contributions to the Plan on their behalf. Salary Reduction
Contributions shall be held, invested and distributed as provided under
applicable provisions of the Plan. However, no Salary Reduction Agreement
(or any other deferral mechanism that may be permitted under the Plan) may
be adopted retroactively. The opportunity to authorize Salary Reduction
Contributions hereunder shall be made available to all Members on a
uniform and non-discriminatory basis. Once Salary Reduction Contributions
have been permitted, if the Administrative Committee determines to stop
Salary Reduction Contributions, an announcement shall be made to all
Employees and the Salary Reduction Contributions to the effective date of
the announcement shall be retained in the Plan subject to its terms and
provisions.
Each Member may enter into a Salary Reduction Agreement whereunder
the Member shall agree, subject to any necessary adjustments pursuant to
this Section and Sections 3.3 and 4.3(i), to a reduction (expressed in
whole percentages only) of not less than one percent (1%) nor more than
fifteen percent (15%) of his Considered Compensation (before such
authorized reduction) attributable to the applicable pay periods, and (ii)
to have the Employer contribute (as a Salary Reduction Contribution) to
the Plan an amount equal to the amount of the authorized reduction, which
Salary Reduction Contribution shall be allocated and credited to the
Member's Employer Nonforfeitable Contributions Account.
Reductions authorized under Salary Reduction Agreements may be
increased or decreased by Members only in the manner and at the time
specified by the Administrative Committee on a uniform and
non-discriminatory basis for all Members.
Salary Reduction Contributions and Matching Contributions
attributable thereto shall automatically be discontinued effective as of
the last day of a periodic pay period during which a Member terminates
employment with all Employers, notwithstanding that a Member may be
entitled to receive severance pay from the Employer.
(b) SPECIAL SALARY REDUCTION AGREEMENTS: Notwithstanding the
preceding subsection, if the Administrative Committee so determines in its
sole discretion, prior to the first day of the last month of the Plan Year
(or such other time period during
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
the Plan Year as determined by the Administrative Committee), each Member
may enter into a Salary Reduction Agreement (in such form as is
satisfactory to the Administrative Committee and hereinafter referred to
as a "Special Salary Reduction Agreement") providing for an increase or a
reduction of Salary Reduction Contributions with respect to any part or
all of the Member's Considered Compensation for any part or all of the
selected month of the Plan Year; provided, however, (i) such Special
Salary Reduction Agreement shall be deemed to modify and override any
prior Salary Reduction Agreement during the period covered by the Special
Salary Reduction Agreement, (ii) the deferrals authorized under the
Special Salary Reduction Agreement may be increased, reduced or revoked
only if permitted by the Administrative Committee, and (iii) the Special
Salary Reduction Agreement shall automatically terminate as of the earlier
of such time (a) it is revoked by the Member in accordance with
nondiscriminatory rules established by the Administrative Committee or (b)
the last day of the period with respect to which authorized reductions
thereunder are contributed to the Plan. All elective deferrals required
under the Plan as a result of the execution of a Special Salary Reduction
Agreement shall be subject to all applicable terms, conditions, and
limitations of the Plan. As of the date that the Special Salary Reduction
Agreement ceases to be operative, the Member's then otherwise operative
Salary Reduction Agreement shall govern deferrals to be made on behalf of
the Member.
(c) DOLLAR LIMIT ON SALARY REDUCTION CONTRIBUTIONS: Notwithstanding
any other provision of the Plan to the contrary, with respect to any
taxable year of any Member beginning after December 31, 1986, deferrals
under the Plan in lieu of cash Considered Compensation, pursuant to any
Salary Reduction Agreement and Special Salary Reduction Agreement, when
added to (i) any employer contribution under the Plan or any other cash or
deferred arrangement (described in Section 401(k) of the Code) to the
extent not includible in gross income for the taxable year under Section
402(a)(8) of the Code, (ii) any employer contribution (to a simplified
pension plan under a compensation deferral agreement) to the extent not
includible in gross income for the taxable year under Section 402(h)(1)(B)
of the Code, (iii) any employer contribution to purchase an annuity
contract (described in Section 403(b) of the Code) under a salary
reduction agreement (within the meaning of Section 3121(a)(5)(D) of the
Code) to the extent not includible in gross income for the taxable year
under Section 403(b) of the Code, and (iv) any employer contribution
(pursuant to any election to defer under any eligible deferred
compensation plan) to the extent not includible in gross income under
Section 457 of the Code, are limited to $7,000 (as adjusted, as may be
determined by the Commissioner of Internal Revenue, at the same time and
in the same manner as prescribed in Section 415(d) of the Code). In
addition, without limiting the scope of the immediately preceding
sentence, with respect to any Plan Year or taxable year of any Member
which begins after December 31, 1987, Salary Reduction Contributions
and/or any similar elective deferrals (described in Section 402(g)(3)
III-3
<PAGE>
of the Code) to the Plan and/or any other qualified plan, contract or
arrangement, which is described in the immediately preceding sentence and
maintained by the Employer and/or any Affiliated Employer, shall not in
the aggregate exceed the dollar limitation (as adjusted) of the
immediately preceding sentence and Section 402(g) of the Code as in effect
at the beginning of such taxable year.
(d) REMEDYING EXCESS DEFERRALS: To the extent that a Member's
elective deferrals authorized pursuant to the Sections of the Code
referenced in the immediately preceding subsection exceed the applicable
limit for the applicable year so that any amount otherwise excludable from
such Member's gross income for federal income tax purposes is includible
in his gross income, then, not later than the first March 1 following the
close of the taxable year of such excess deferral, the Member shall notify
the Administrative Committee in writing of any portion of any such excess
deferrals which the Member has elected to allocate to the Plan. Such
notice shall include the Member's certified written claim for a specified
amount of excess deferrals for the preceding calendar year and shall be
accompanied by the Member's certified written statement that if such
amounts are not distributed, such excess deferrals, when added to amounts
deferred under other plans or arrangements described in Sections 401(k),
408(k), 403(b) or 457 of the Code, exceeds the limit imposed under Section
402(g) of the Code for the year in which the deferral occurred. In
accordance with Section 1.402(g)-1(e)(2) of the Income Tax Regulations, to
the extent that the Member only has elective deferrals for the taxable
year under the Plan and any other plan or arrangement described in the
previous sentence which is maintained by the same Employer, such Employer
may notify the Administrative Committee of any excess deferrals made on
behalf of the Member.
Following actual receipt by the Administrative Committee of the
notice described in the immediately preceding paragraph, (notwithstanding
any other provision of law or the Plan relating to spousal consent), not
later than the first April 15 immediately following such March 1 deadline
for written notification of the Administrative Committee, the Plan shall
distribute to such Member in a lump sum (in cash or in kind) the amount of
excess elective deferrals allocated to the Plan (and any income allocable
to such amount). Such distribution shall be made first by dis tribution of
nonmatched Salary Reduction Contributions, if any, allocated to the
Member's Employer Nonforfeitable Contributions Account, and, if necessary,
next by distribution of Salary Reduction Contributions which were matched
with Matching Contributions. To the extent that such excess deferrals are
attributable to matched Salary Reduction Contributions (and any income
allocable thereto) which amounts are distributed to the Member pursuant to
the preceding provisions of this Section, Matching Contributions (and any
income allocable thereto) will be appropriately reduced and such reduced
Matching Contributions (and any income allocable thereto) shall be applied
as forfeitures pursuant to Section 4.6. The provisions of this paragraph
(which provide for reduction of Matching Contributions
::ODMA\PCDOCS\HOUSTON\998884\1
III-4
<PAGE>
made with respect to Salary Reduction Contributions which are distributed
hereunder) are intended to comply with the requirements of Sections
401(a), 401(k), 401(m) and 411 of the Code. To the extent that any
provision of this paragraph is inconsistent with the preceding sentence,
such provision shall be deemed to be inoperative and the Plan shall be
operated in a manner that complies with the requirements of the
immediately preceding sentence.
Income or loss allocable to the portion of the Member's Employer
Nonforfeitable Contributions Account that is attributable to excess
elective deferrals (described below) shall be income or loss for the
taxable year allocable to the portion of Member's Employer Nonforfeitable
Contributions Account that is attributable to elective deferrals
multiplied by a fraction, the numerator of which is the Member's excess
elective deferrals for the year and the denominator of which is the
balance as of the end of such year of the portion of the Member's Employer
Nonforfeitable Contributions Account that is attributable to elective
deferrals reduced by any gain and increased by any loss allocable to such
balance for the taxable year. In the event that a separate subaccount is
not maintained with respect to elective deferrals (and any income
allocable thereto), the portion of the Employer Nonforfeitable Contri
butions Account that is attributable to elective deferrals is determined
by multiplying the balance of the Member's Employer Nonforfeitable
Contributions Account by a fraction, the numerator of which is the Salary
Reduction Contributions credited to the Member's Employer Nonforfeitable
Contributions Account less any withdrawals, and the denominator of which
is the sum of all Employer Contributions made on behalf of the Member and
credited to the Member's Employer Nonforfeitable Contributions Account
less any withdrawals. Similar rules apply with respect to determination of
Matching Contributions allocated to the Employer Contributions Account and
any income allocable thereto. No income or loss will be allocated for the
gap period between the end of the taxable year to the date of distribution
for Plan Years beginning on or after January 1, 1992 and, with respect to
Plan Years beginning before such date, income or loss shall be allocated
in accordance with the applicable Income Tax Regulations and Plan document
as then in effect.
Notwithstanding the preceding provisions of this subsection, any
Member who has excess elective deferrals for a taxable year may receive a
corrective distribution of such deferrals (and income attributable
thereto) during the same year if the Member notifies the Administrative
Committee of an excess deferral, the correcting distribution is made after
the date on which the Plan received the excess deferral and the Plan
designates and treats the distribution as a distribution of an excess
deferral. Any distribution described in the immediately preceding sentence
shall be made as soon as practicable, but absent circumstances beyond the
control of the Administrative Committee, not later than 60 days after the
first day of the month that occurs on or after the later of (i) the actual
receipt by Administrative Committee of the Member's notification of an
excess deferral or (ii) the date that the Plan actually receives the
excess elective deferral. The income allocable to elective
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
deferrals from the first day of the taxable year to the date of the
distribution shall be determined by using the method described in the
immediately preceding paragraph.
Notwithstanding any other provision of this subsection to the
contrary, the amount of excess elective deferrals that may be distributed
under this subsection shall be reduced by any excess contributions over
the ADP limit (described in Section 3.3) in excess of actual deferral
percentage limits (described in Section 3.3) previously distributed with
respect to a Member for the Plan Year beginning with or within such
Member's taxable year. In no event shall any Member receive from the Plan
a corrective distribution for the taxable year of an amount in excess of
the Member's total elective deferrals under the Plan for the taxable year.
Except as may be otherwise required under Section 3.3, any excess deferral
not timely distributed shall remain in the Plan and be subject to
otherwise applicable which are timely distributed under the preceding
provisions of this subsection conditions and limitations thereof. In
addition, any excess elective deferrals which are timely distributed under
the preceding provisions of this subsection shall not be treated as annual
additions under Section 4.3. Also, excess deferrals by Non-Highly
Compensated Employees shall not be taken into account under the ADP test
of Section 3.3 to the extent such excess deferrals are made under the Plan
or any other qualified plan of the Employer or any Affiliated Employer. A
distribution of elective deferrals (and allocable income thereon) under
this subsection shall not be considered as a distribution for purposes of
compliance with the minimum distribution provisions of Section 6.6.
3.2 ROLLOVER CONTRIBUTIONS: Rollover Contributions shall be permitted from
time to time as determined by the Administrative Committee. In the event that
Rollover Contributions are permitted, the opportunity to contribute shall be
made available to all Employees on an equal and nondiscriminatory basis;
provided, however, an Employee must have at least ninety (90) days of continuous
service with an Employer in order to be eligible to make a Rollover Contribution
to the Plan. If the Administrative Committee determines to permit Rollover
Contributions and directs the Trustee of such determination, for the limited
purpose of being eligible to make a Rollover Contribution, all Employees of the
Employer who satisfy the ninety-day service requirement set forth in the
preceding sentence shall be considered Members of the Plan. Such Employees shall
not, however, be entitled to authorize Salary Reduction Contributions to the
Plan or share in the allo cation of any Employer Contributions unless and until
they meet the requirements of Sections 2.1, 3.1 and 4.2. A Rollover Contribution
shall be held in a separate Employee Rollover Account for the Member which shall
share in any income or loss and appreciation or depreciation of the Trust Fund.
Rollover Contributions shall have no effect on any limitation under the Plan
based on Contributions.
3.3 EMPLOYER CONTRIBUTIONS:
(a) SALARY REDUCTION CONTRIBUTIONS: Subject to the applicable
limitations of the Plan set forth below, each periodic pay period the
Employer shall contribute
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
to the Trust (without regard to its Net Income or accumulated earnings and
profits) Salary Reduction Contributions for each Member in an amount equal
to the amount by which the Member's Considered Compensation was reduced
pursuant to a Salary Reduction Agreement (and, if applicable, Special
Salary Reduction Agreement) executed by the Member in accordance with
Section 3.1.
(b) MATCHING CONTRIBUTIONS: Subject to Section 11.5 and the
applicable limitations of the Plan set forth below, in addition to Salary
Reduction Contributions, with respect to each Plan Year (or such shorter
period as may be prescribed by the Administrative Committee), the Employer
may, in the discretion of the Board, contri bute to the Trust (without
regard to its Net Income or accumulated earnings and prof its) Matching
Contributions on behalf of each eligible Member in an amount equal to (i)
fifty percent (50%) of the dollar amount of the Salary Reduction
Contributions authorized by the Member and permitted under the Plan that
are not in excess of two percent (2%) of such Member's Considered
Compensation, and (ii) one hundred percent (100%) of the dollar amount of
the Salary Reduction Contributions authorized by the Member and permitted
under the Plan in excess of two percent (2%) but not in excess of four
percent (4%) of the Member's Considered Compensation, as follows:
SALARY REDUCTION MATCHING
CONTRIBUTION PERCENTAGE CONTRIBUTION PERCENTAGE
----------------------- -----------------------
1% 50%
2% 50%
3% 100%
4% 100%
In excess of 4% 0
Notwithstanding any provision in the immediately preceding paragraph
to the contrary, for purposes of Matching Contributions only, no Member
who is a non-management commissioned employee of an Employer (as such
position is determined by the Administrative Committee) shall be entitled
to an allocation of Matching Contributions to his account in excess of
$900 in any Plan Year. The provisions of the immediately preceding
sentence are intended to not discriminate in favor of the group of Highly
Compensated Employees. Any decision to provide a Matching Contribution for
any Plan Year (or such shorter period as may be prescribed by the
Administrative Committee) or any increase or decrease in the percentage in
effect from time to time, shall be communicated to all eligible Employees
by the Administrative Committee.
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
(c) PROFIT SHARING CONTRIBUTIONS: Subject to applicable limitations
of the Plan set forth below, in addition to the above Contributions, with
respect to each Plan Year, the Employer may contribute to the Trust (from
its Net Income or accumulated earnings and profits) Profit Sharing
Contributions in such amount as may be determined by the Board in its
discretion. With respect to Plan Years beginning on or after January 1,
1991, Profit Sharing Contributions, if any, shall be made on behalf of
each Member who remains in the employ of the Employer on the last day of
the Plan Year, notwithstanding the fact that the Member did not elect to
authorize Salary Reduction Contributions under Section 3.1 at any time
during such Plan Year. For purposes of the preceding sentence, (i) any
Member whose employment terminates on account of normal retirement, Total
and Permanent Disability, or death, shall be deemed to be in the employ of
the Employer on the last day of the Plan Year in which the termination of
employment occurs, and (ii) any Member who is, on the last day of the Plan
Year (or applicable shorter period), on a leave of absence to which such
Member is entitled under the FMLA shall be deemed to be in the employ of
the Employer on such last day unless final regulations issued under the
FMLA do not require such treatment for this purpose.
The Board, in its discretion, may designate any portion of the
Profit Sharing Contribution as an additional Matching Contribution.
(d) QUALIFIED NONELECTIVE CONTRIBUTIONS: At the election of the
Board, in lieu of distributing excess Employer Contributions to Highly
Compensated Employees in order to satisfy the ADP test or the ACP test, as
described below in this Section, the Employer may make Qualified
Nonelective Contributions on behalf of Non-Highly Compensated Employees
who are Members in such amounts as are sufficient to satisfy the ADP test
or the ACP test, as applicable. Qualified Nonelective Contributions, if
any, shall be made on behalf of each Member who (i) is a Non-Highly
Compensated Employee and (ii) remains in the employ of the Employer as of
the last day of the Plan Year. For purposes of the preceding sentence, (i)
any Member whose employment terminates on account of normal retirement,
Total and Permanent Disability, or death, shall be deemed to be in the
employ of the Employer on the last day of the Plan Year in which the
termination of employment occurs, and (ii) any Member who is, on the last
day of the Plan Year (or applicable shorter period), on a leave of absence
to which such Member is entitled under the FMLA shall be deemed to be in
the employ of the Employer on such last day unless final regulations
issued under the FMLA do not require such treatment for this purpose.
(e) RESTORATION OF FORFEITED BENEFITS: Not later than the last day
of the Plan Year in which occurs any repayment described in Section 4.6,
the Employer shall contribute (without regard to its Net Income or
accumulated earnings and profits) an amount which, when added to
unallocated forfeitures, shall be equal to the
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
amount previously forfeited under applicable provisions of the Plan by any
Member entitled to have his Account restored in accordance with Section
4.6. In addition, as soon as administratively practicable following
receipt of a claim under circumstances described in Section 6.7, the
Employer shall contribute (without regard to its Net Income or accumulated
earnings and profits) an amount equal to the value of the forfeited
benefits described in and payable under Section 6.7.
(f) TOP-HEAVY MINIMUM CONTRIBUTION: In the event that the Plan is a
Top-Heavy Plan described in Article VII with respect to any Plan Year, the
Employer shall contribute (without regard to its Net Income or accumulated
earnings and profits) any amount necessary to ensure that Members who are
entitled to a minimum allocation pursuant to Section 7.3(c) in fact
receive such allocation.
(g) CONTRIBUTION LIMITS: No Contribution by the Employer shall
exceed a sum equal to fifteen percent (15%) of the total compensation paid
or accrued during its taxable year ending with or within the Plan Year to
all Members.
No Contribution shall be made to the Plan under circumstances which
would result in any violation of the limitations of Section 3.1, this
Section or Section 4.3 of the Plan. The Employer shall maintain such
records as may be necessary to demonstrate compliance with the
nondiscrimination tests set forth below in this Section.
(h) ACTUAL DEFERRAL PERCENTAGE TEST: The actual deferral percentage
("ADP") for all eligible Highly Compensated Employees shall not exceed the
greater of:
(i) the actual deferral percentage for the group of all
eligible NonHighly Compensated Employees multiplied by 1.25, or
(ii) the actual deferral percentage of the group of all
eligible Nonhighly Compensated Employees multiplied by 2.0;
provided, however, that the actual deferral percentage for the group
of eligible Highly Compensated Employees may not exceed the actual
deferral percentage of the group of all eligible Non-Highly
Compensated Employees by more than two percentage points.
For purposes of the immediately preceding sentence, for Plan Years
commencing after December 31, 1986, the provisions of Section 401(k)(3) of
the Code and Section 1.401(k)-1 of the Income Tax Regulations are hereby
incorporated into the Plan for all purposes. In addition, for Plan Years
beginning after December 31, 1988, if (i) any Highly Compensated Employee
is eligible to authorize Salary Reduction Contributions under the Plan and
to have Matching Contributions allocated with
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
respect thereto or (ii) such Highly Compensated Employee is eligible to
make elective deferrals (described in Section 402(g)(3) of the Code) under
any other cash or deferred arrangement (described in Section 401(k) of the
Code) and/or to make employee contributions (described in Section 401(m)
of the Code) or to receive matching contributions (described in Section
401(m) (4)(A) of the Code) under any other qualified plan of the Employer
and/or any Affiliated Employer regardless of whether such plan contains a
cash or deferred arrangement, the disparities between the actual deferral
percentages of the respective groups of eligible Highly Compensated
Employees and Non-Highly Compensated Employees shall be reduced as
described in Section 1.401(m)-2 of the Income Tax Regulations, and the
provisions of subsection (i) below.
Subject to the provisions of the Plan set forth below, the actual
deferral percentage for a specified group of eligible Employees for a Plan
Year shall be the average of the actual deferral ratios (calculated
separately for each Employee in such group) of the sum of Salary Reduction
Contributions, Qualified Nonelective Contributions, if any, and Profit
Sharing Contributions, if any, actually paid over to the Trust on behalf
of each such Employee for such Plan Year, and allocated to the Employee's
Employer Nonforfeitable Contributions Account for such Plan Year, to the
Employee's Compensation (described below) for the Plan Year.
Notwithstanding the immediately preceding sentence, a Salary Reduction
Contribution will be taken into account for purposes of the ADP test only
if it relates to Compensation that either (i) would have been received by
the Employee in the Plan Year but for the Employee's deferral election or
(ii) is attributable to services performed by the Employee during the Plan
Year and, but for the Employee's election to defer, would have been
received by the Employee within two and one-half (2 1/2) months after the
close of the Plan Year. For purposes of the second preceding sentence a
Salary Reduction Contribution will be considered as having been allocated
to the Employee's Employer Nonforfeitable Contribution Account as of a
date within a Plan Year, and thus taken into account for purposes of the
ADP test for that Plan Year, if allocation of such Salary Reduction
Contribution is not contingent upon participation or performance of
services after such date during the Plan Year and the Salary Reduction
Contribution is actually paid to the Trust no later than twelve (12)
months after the Plan Year to which such Contribution relates.
For the purposes of performing the ADP test, Compensation shall mean
all remuneration:
(i) that is (a) received during the Plan Year by the eligible
Employee from the Employer and is required to be reported as wages
on the eligible Employee's form W-2 (or its successor) for federal
income tax withholding purposes, 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) of the
::ODMA\PCDOCS\HOUSTON\998884\1
III-10
<PAGE>
Code), plus (b) any reduction under a compensation deferral
agreement under (1) a plan described in Section 401(k) or 408(k) of
the Code, (2) an annuity described in Section 403(b) of the Code or
(3) an election under a cafeteria plan described in Section 125 of
the Code,
(ii) that, subject to clause (iv) below, is actually paid to
or is includible (within the meaning of Section 1.415-2(d)(3) and
(4) of the Income Tax Regulations) in the gross income of the
eligible Employee within the relevant Plan Year, or would have been
so paid or includible but for a reduction described in clause (i)
immediately above,
(iii) that does not exceed $200,000 or, for Plan Years
beginning after December 31, 1993, $150,000 (as adjusted at such
time and in such manner as may be prescribed in Section 401(a)(17)
of the Code), and
(iv) that is received by the eligible Employee during the
entire Plan Year and not only while he is a Member.
Without limiting the scope of clause (iv) of the immediately preceding
sentence, in the case of an Employee who begins, resumes or ceases to be
eligible to authorize Salary Reduction Contributions during a Plan Year,
all Compensation paid by the Employer to the Employee during the entire
Plan Year will be taken into account whether or not the Employee was a
Member for the entire Plan Year.
For the purposes of the immediately preceding paragraph, provided
that the ADP test is satisfied both with and without exclusion of these
Salary Reduction Contributions, Salary Reduction Contributions shall
include excess elective deferrals over the annual dollar limit described
in Section 3.1 (even if distributed under Section 3.2) made by Highly
Compensated Employees, as well as all Salary Reduction Contributions made
by all Members that are not taken into account in the ACP test described
in a subsection below. In accordance with Section 1.402(g)- 1(e)(iii) of
the Income Tax Regulations, excess elective deferrals described in Section
3.1 made by Non-Highly Compensated Employees, to the extent made under the
Plan or a plan maintained by an Affiliated Employer, shall not be taken
into account under the ADP test described in this subsection.
For the purpose of calculating the actual deferral percentages
hereunder, subject to and in accordance with regulations or other
authority issued under Sections 401(k) and/or 401(m) of the Code, only
such portion of the applicable Contributions (as described in the second
preceding paragraph) as may be necessary to ensure compliance with the ADP
test shall be taken into account for purposes of that test. With respect
to Plan Years commencing after December 31, 1988, such actual
::ODMA\PCDOCS\HOUSTON\998884\1
III-11
<PAGE>
deferral ratios of each eligible Employee and the ADP of each group shall
be calculated to the nearest one-hundredth of one percent of the eligible
Employee's Compensation. The actual deferral ratio of an eligible Employee
is zero if no applicable Contributions were allocated to such Employee's
Employer Nonforfeitable Contributions Account for the Plan Year.
In accordance with the requirements of Section 1.401(k)-1(b)(3) of
the Income Tax Regulations, two or more cash or deferred arrangements (as
defined in Section 401(k) of the Code) may be considered one such
arrangement for purposes of determining whether such arrangements satisfy
the requirements of Sections 401(a)(4), Section 401(k) and 410(b) of the
Code. In such case, the cash or deferred arrangements included in such
plans and the plans including such arrangements shall be treated as one
arrangement and as one plan for purposes of applying this Section 3.3 and
Sections 401(a)(4), 401(k) and 410(b) of the Code. If the Employer and any
Affiliated Employer individually or collectively maintain two or more
plans that are treated as a single plan for purposes of Section 401(a)(4)
or 410(b) of the Code (other than Section 410(b)(2)(A)(ii) of the Code as
in effect for Plan Years which begin after December 31, 1988), all cash or
deferred arrangements that are included in such plans are to be treated as
a single arrangement for purposes of this Section and Sections 401(a)(4),
401(k) and 410(b) of the Code. For Plan Years beginning after December 31,
1989, plans may be aggregated under the preceding provisions of this
paragraph only if they have the same Plan Year.
With respect to Plan Years beginning after December 31, 1986, if any
Highly Compensated Employee is a participant under two or more cash or
deferred arrangements (as defined in Section 401(k) of the Code) of the
Employer, for purposes of determining the actual deferral ratio with
respect to such Highly Compensated Employee, all such cash or deferred
arrangements shall be treated as one cash or deferred arrangement. For
Plan Years beginning after December 31, 1988, if a Highly Compensated
Employee participates in two or more cash or deferred arrangements that
have different plan years, the immediately preceding sentence shall be
applied by treating all cash or deferred arrangements with years ending
with or within the same calendar year as a single arrangement. For Plan
Years beginning after 1988, contributions and allocations under an
employee stock ownership plan described in Section 4975(e)(7) of the Code
may not be combined with contributions or allocations under any plan not
described in Section 4975(e)(7) of the Code.
With respect to Plan Years beginning prior to January 1, 1992, the
Plan or, if the Plan is aggregated with another cash or deferred
arrangement pursuant to the previous paragraph, such aggregated Plan may,
in the discretion of the Administrative Committee, be restructured (in
accordance with Sections 1.401(k)- 1(h)(3)(iii), 1.401(a)(4)-1(c)(8)(iii)
and 1.401(a)(4)-9(c) of the Income Tax
::ODMA\PCDOCS\HOUSTON\998884\1
III-12
<PAGE>
Regulations) into two or more component plans for purposes of determining
whether the Plan or aggregated Plan satisfies Section 401(a)(4) of the
Code and the ADP test set forth above. If each of the component plans of
the Plan or aggregated Plan satisfies all of the requirements of Sections
401(a)(4) and 410(b) of the Code as if it were a separate Plan or
aggregated Plan, then the Plan or aggregated Plan is treated as satisfying
Section 401(a)(4) of the Code. If the Plan or aggregated Plan is
restructured into component plans for purposes of testing for compliance
with Section 401(a)(4) of the Code and the ADP test, each component plan
resulting from such restructuring shall consist of all of the allocations,
accruals and other benefits, rights and features provided to a group of
Employees under the Plan or aggregated Plan. Each Employee is permitted to
be included in only one such component plan.
With respect to Plan Years beginning after December 31, 1986, if an
eligible Highly Compensated Employee is subject to the family aggregation
rules of Section 414(q)(6) of the Code (as described in the third
paragraph of the Highly Compensated Employee definition in Article I)
because such person is either a 5-percent owner (described in the Highly
Compensated Employee definition) or a Highly Compensated Employee in the
group consisting of the ten Highly Compensated Employees paid the greatest
compensation (as described in the Highly Compensated Employee definition),
the combined actual deferral ratio of the family group (which is treated
as one Highly Compensated Employee) shall be determined by combining the
Compensation, as well as the applicable Contributions (described above)
which are allocated to the Employer Nonforfeitable Contributions Account
of all such eligible family members described in this sentence. The
Compensation, as well as the applicable Contributions (described above)
allocated to the Employer Nonforfeitable Contributions Accounts of all
eligible family members, are disregarded for purposes of determining the
ADP of the group of Non-Highly Compensated Employees. If any eligible
Employee is required to be aggregated as a member of more than one family
group, all eligible Employees who are members of those family groups that
include such Employee are aggregated as one family group in accordance
with the preceding provisions of this paragraph.
(i) EXCESS EMPLOYER CONTRIBUTIONS OVER ADP LIMITS:
DISTRIBUTION OF EXCESS EMPLOYER CONTRIBUTIONS: In the event that
with respect to any Plan Year, the aggregate amount of Employer
Contributions (taken into account in computing the ADP of Highly
Compensated Employees for the Plan Year) exceeds the maximum amount of
such Employer Contributions permitted under the ADP test set out above,
then (to the extent that another means of satisfying the ADP test is not
implemented by the Administrative Committee), within two and one-half
months from the end of the Plan Year or as soon as practicable, but not
later than the end of the Plan Year immediately following the Plan Year to
which any such excess Employer Contributions pertain, such excess (plus
allocable income or loss)
::ODMA\PCDOCS\HOUSTON\998884\1
III-13
<PAGE>
shall be distributed to Highly Compensated Employees as provided below. In
lieu of distribution of excess Contributions, within twelve (12) months
after the end of the Plan Year, the Employer may make Qualified
Nonelective Contributions on behalf of Non-Highly Compensated Employees
pursuant to Section 3.3(d) in an amount sufficient to satisfy the ADP test
for the Plan Year.
The amount of such excess Employer Contributions for a Highly
Compensated Employee for a Plan Year shall be determined by the following
leveling method, under which the actual deferral ratio of the Highly
Compensated Employee with the highest actual deferral ratio is reduced to
the extent required to (i) enable the Plan to satisfy the ADP test set out
above, or (ii) cause such Highly Compensated Employee's actual deferral
ratio to equal the ratio of the Highly Compensated Employee with the next
highest actual deferral ratio. This process shall be repeated until the
Plan satisfies the ADP test. For each Highly Compensated Employee, the
amount of such excess Employer Contributions is equal to the applicable
Contributions (described above) that were allocated to such Employee's
Employer Nonforfeitable Contributions Account and taken into account in
computing his actual deferral ratio (determined prior to the application
of this and the immediately preceding sentence), minus the amount
determined by multiplying such Employee's actual deferral ratio
(determined after application of this and the immediately preceding
sentence) by his Compensation used in determining such ratio. The amount
of excess contributions that may be distributed under this subsection to
an affected Member for a Plan Year shall be reduced by any excess
deferrals that were previously distributed to such Member with respect to
his taxable year ending with or within such Plan Year.
Any such excess Employer Contributions shall be allocated to Members
who are subject to the family member aggregation rules of Section
414(q)(6) of the Code (described in the third paragraph of the Highly
Compensated Employee definition) in the manner prescribed under Section
1.401(k)-1(f)(5) of the Income Tax Regulations. In addition, any such
excess Employer Contributions shall be treated as annual additions subject
to Section 4.3 of the Plan.
For purposes of this subsection, in accordance with Section
1.401(k)- 1(f)(4)(ii)(C) of the Income Tax Regulations, income or loss
that is allocable to excess Employer Contributions (described above) for
the Plan Year shall be the income or loss allocable to the Member's
Employer Nonforfeitable Contributions Account (to the extent attributable
to applicable Contributions (described above) used in the ADP test),
multiplied by a fraction. The numerator of this fraction is the Member's
excess Employer Contributions for the Plan Year. The denominator is the
balance of the Member's Employer Nonforfeitable Contributions Account (to
the extent attributable to applicable Contributions (described above) used
in the ADP test), as of the beginning of that Plan Year, plus the
applicable Contributions
::ODMA\PCDOCS\HOUSTON\998884\1
III-14
<PAGE>
(described above) allocated to his Employer Nonforfeitable Contributions
Account for the Plan Year. No income or loss will be allocated for the gap
period between the end of the Plan Year to the date of distribution for
Plan Years beginning on or after January 1, 1992 and, with respect to Plan
Years beginning before such date, income or loss shall be allocated in
accordance with the applicable Income Tax Regulations and Plan document as
then in effect.
Excess Employer Contributions (and any income allocable thereto)
shall be distributed from the portion of the Employer Nonforfeitable
Contributions Account attributable to the Contributions used in the ADP
test. In addition, to the extent that such excess Employer Contributions
are attributable to Salary Reduction Contributions (and any income
allocable thereto) which amounts are distributed to the Member pursuant to
the preceding provisions of this subsection, Matching Contributions (and
any income allocable thereto determined in the same manner as for other
contributions) will be appropriately reduced and such reduced Matching
Contributions (and any income allocable thereto) shall be applied as
forfeitures pursuant to Section 4.6. Such reduction shall be made first by
reduction of Matching Contributions allocated to the Member's Employer
Nonforfeitable Contributions Account, and, if necessary, next by reduction
of Matching Contributions allocated to the Member's Employer Contributions
Account. The provisions of this paragraph (which provide for reduction of
Matching Contributions made with respect to excess Salary Reduction
Contributions which are distributed hereunder) are intended to comply with
the requirements of Sections 401(a), 401(k), 401(m) and 411 of the Code.
To the extent that any provision of this paragraph is inconsistent with
the preceding sentence, such provision shall be deemed to be inoperative
and the plan shall be operated in a manner that complies with the
requirements of the immediately preceding sentence.
(j) ACTUAL CONTRIBUTION PERCENTAGE TEST: The actual contribution
percentage ("ACP"), as determined for a Plan Year pursuant to this
subsection, for all eligible Highly Compensated Employees shall not exceed
the greater
of:
(i) the ACP for the group of all eligible Non-Highly
Compensated Employees multiplied by 1.25, or
(ii) the ACP of the group of all eligible Non-Highly
Compensated Employees multiplied by 2.0; provided, however, that the
ACP for the group of eligible Highly Compensated Employees may not
exceed the ACP for the group of all eligible Non-Highly Compensated
Employees by more than two percentage points (2%).
For purposes of the immediately preceding sentence, for Plan Years
commencing after December 31, 1986, the provisions of Section 401(m) of
the Code and Section
::ODMA\PCDOCS\HOUSTON\998884\1
III-15
<PAGE>
1.401(m)-1 of the Income Tax Regulations are hereby incorporated into the
Plan for all purposes. In addition, for Plan Years beginning after
December 31, 1988, if any Highly Compensated Employee is eligible to
authorize Salary Reduction Contributions under the Plan and to have
Matching Contributions allocated with respect thereto, or if such Highly
Compensated Employee is eligible to make elective deferrals (described in
Section 402(g)(3) of the Code) under any other cash or deferred
arrangement (described in Section 401(k) of the Code) and/or to make
employee contributions (described in Section 401(m) of the Code) or to
receive matching contributions (described in Section 401(m)(4)(A) of the
Code) under any other qualified plan of the Employer and/or any Affiliated
Employer regardless of whether such plan contains a cash or deferred
arrangement, the disparities between the ACPs of the respective groups of
eligible Highly Compensated Employees and Non-Highly Compensated Employees
shall be reduced as described in Section 1.401(m)-2 of the Income Tax
Regulations and subsequent provisions of this subsection.
Subject to the limitations set forth below, the ACP for a specified
group of eligible Employees for a Plan Year shall be the average of the
actual contribution ratios (calculated separately for each Employee in
such group) of the sum of any (i) Matching Contributions and allocated to
his Employer Contributions Account for the Plan Year, and (ii) to the
extent taken into account under Section 1.401(m)-1(b)(5) of the Income Tax
Regulations and this subsection, any Salary Reduction Contributions,
Qualified Nonelective Contributions, and Profit Sharing Contributions
allocated to the Employee's Employer Nonforfeitable Contributions Account
for such Plan Year, to the Employee's Compensation (defined below) for the
Plan Year. Notwithstanding anything in the preceding sentence to the
contrary, the ACP described in the preceding sentence shall not include
Matching Contributions that are forfeited either to correct excess
aggregate contributions or because the contributions to which they relate
are excess deferrals, excess contributions or excess aggregate
contributions. To the extent that any Contribution is required to satisfy
the ADP test set forth above in this Section, it may not be used to
satisfy the ACP test. For the purposes of performing the ACP test,
Compensation shall mean all remuneration:
(i) that is (a) received during the Plan Year by the eligible
Employee from the Employer and reported as wages on the eligible
Employee's form W-2 (or its successor) for federal income tax
withholding purposes, 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) of the Code),
plus (b) any reduction under a compensation deferral agreement under
(1) a plan described in Section 401(k) or 408(k) of the Code, (2) an
annuity described in Section 403(b) of the Code or (3) an election
under a cafeteria plan described in Section 125 of the Code,
::ODMA\PCDOCS\HOUSTON\998884\1
III-16
<PAGE>
(ii) that subject to clause (iv) below, is actually paid to or
is includible (within the meaning of Section 1.415-2(d)(3) and (4)
of the Income Tax Regulations) in the gross income of the eligible
Employee within the relevant Plan Year, or would have been so paid
or includible but for a reduction described in clause (i)
immediately above,
(iii) that does not exceed $200,000 or, for Plan Years
beginning after December 31, 1993, $150,000 (as adjusted at such
time and in such manner as may be prescribed in Section 401(a)(17)
of the Code), and
(iv) that is received by the eligible Employee during the
entire Plan Year and not only while he is a Member.
For purposes of computing the ACP ratios, Salary Reduction
Contributions shall include excess elective deferrals described in Section
3.1 and any Salary Reduction Contributions that are not taken into account
in the ADP test, provided that the ADP test is satisfied both with and
without exclusion of these Salary Reduction Contributions. Any Qualified
Nonelective Contributions and any Profit Sharing Contributions allocated
to the Member's Employer Nonforfeitable Contributions Account, as provided
above, shall be taken into account for purposes of the ACP test to the
extent that such amounts are not needed to pass the ADP test. With respect
to Plan Years commencing after December 31, 1988, actual contribution
ratios of each eligible Employee and the ACP of each group shall be
calculated to the nearest one-hundredth of one percent of the eligible
Employee's Compensation. The actual contributions ratio of an eligible
Employee is zero if no Contributions which are used in computing actual
contribution ratios are allocated on behalf of such Employee.
If the Employer and any Affiliated Employer, individually or
collectively, maintain two or more plans that are treated as a single plan
for purposes of Section 401(a)(4) or 410(b) of the Code (other than
Section 410(b)(2)(A)(ii) of the Code as in effect for Plan Years which
began after December 31, 1988), all employee contributions and matching
contributions, as such contributions are defined in Section 1.401(m)-1(f)
of the Income Tax Regulations, are to be treated as made under a single
plan for purposes of this Section and Sections 401(a)(4), 401(k) and
410(b) of the Code. For Plan Years beginning after December 31, 1989,
plans may be aggregated under the preceding provisions of this paragraph
only if they have the same Plan Year. With respect to Plan Years beginning
after December 31, 1986, if any Highly Compensated Employee is a
participant under two or more plans of the Employer or any Affiliated
Employer which are subject to Section 401(m) of the Code, for purposes of
determining the actual contribution ratio with respect to such Highly
Compensated Employee, all employee and/or matching contributions described
in Section 1.401(m)-1(f) of the Income Tax Regulations (or any successor
::ODMA\PCDOCS\HOUSTON\998884\1
III-17
<PAGE>
thereto) made under such plans must be aggregated. For Plan Years
beginning after 1988, contributions and allocations under an employee
stock ownership plan described in Section 4975(e)(7) of the Code may not
be combined with contributions or allocations under any plan not described
in Section 4975(e)(7) of the Code.
With respect to Plan Years beginning prior to January 1, 1992, the
Plan or, if the Plan is aggregated with another plan pursuant to the
previous paragraph, such aggregated Plan may, in the discretion of the
Administrative Committee, be restructured (in accordance with Sections
1.401(m)-1(g)(5), 1.401(a)(4)-1 (c)(8)(iii) and 1.401(a)(4)-9(c) of the
Income Tax Regulations) into two or more component plans for purposes of
determining whether the Plan or aggregated Plan satisfies Section
401(a)(4) of the Code and the ACP test set forth above. If each of the
component plans of the Plan or aggregated Plan satisfies all of the
requirements of Sections 401(a)(4) and 410(b) of the Code as if it were a
separate Plan or aggregated Plan, then the Plan or aggregated Plan is
treated as satisfying Section 401(a)(4) of the Code. If the Plan or
aggregated Plan is restructured into component plans for purposes of
testing for compliance with Section 401(a)(4) of the Code and the ACP
test, each component plan resulting from such restructuring shall consist
of all the allocations, accruals, and other benefits, rights and features
provided to a group of Employees under the Plan or aggregated Plan. Each
Employee is permitted to be included in only one such component plan.
With respect to Plan Years beginning after December 31, 1986, if an
eligible Highly Compensated Employee is subject to the family aggregation
rules of Section 414(q)(6) of the Code (described in the third paragraph
of the Highly Compensated Employee definition in Article I) because such
person is either a 5-percent owner (as described in the Highly Compensated
Employee definition) or a Highly Compensated Employee in the group
consisting of the ten Highly Compensated Employees paid the greatest
compensation (as described in the Highly Compensated Employee definition),
the combined actual contribution ratio of the family group (which is
treated as one Highly Compensated Employee) shall be determined by
combining the Compensation, as well as the applicable Contributions
(described above) which are allocated to the appropriate Accounts of all
eligible family members described in this sentence. The Compensation, as
well as the applicable Contributions (described above) which are allocated
to the appropriate Accounts of all eligible family members are disregarded
for purposes of determining the ACP of the group of Non-Highly Compensated
Employees. If any eligible Employee is required to be aggregated as a
member of more than one family group, all eligible Employees who are
members of those family groups that include that Employee shall be
aggregated as one family group in accordance with the preceding provisions
of this paragraph.
::ODMA\PCDOCS\HOUSTON\998884\1
III-18
<PAGE>
(k) PROHIBITED MULTIPLE USE OF 2.0/2% ALTERNATIVE LIMITS FOR THE ADP
AND ACP TESTS: Any disparity between the ADP or ACP of the respective
groups of Highly Compensated Employees and Non-Highly Compensated
Employees shall be reduced as described in Section 1.401(m)-2 of the
Income Tax Regulations (or any successor regulations). Without limiting
the scope of the immediately preceding sentence, any multiple use of the
alternative method of compliance with the ADP and ACP tests (i.e., the
2.0/2% alternative limit which is described in clauses (ii) and (iv) below
and in Sections 401(k)(3)(A)(ii)(II) and 401(m)(2)(A)(ii) of the Code)
shall be determined and corrected, as appropriate, in accordance with the
provisions of this subsection.
Multiple use of the alternative limitation shall occur if the sum of
(a) the ADP of the entire group of eligible Highly Compensated Employees
under the Plan or any other cash or deferred arrangement (described in
Section 401(k) of the Code) of the Employer or an Affiliated Employer and
(b) the ACP of the entire group of eligible Highly Compensated Employees
under the Plan or any other qualified plan of the Employer or an
Affiliated Employer that is subject to Section 401(m) of the Code, exceeds
the greater of:
(i) 125 percent of the GREATER of (1) the ADP of the group of
Non-Highly Compensated Employees eligible under the Plan (or other
arrangement of the Employer or Affiliated Employer that is subject
to Section 401(k) of the Code) for the Plan Year, or (2) the ACP of
the group of Non-Highly Compensated Employees under the Plan (or
other plan of the Employer or Affiliated Employer that is subject to
Section 401(m) of the Code) for the Plan Year beginning with the
Plan Year of the Plan (or other arrangement that is subject to
Section 401(k) of the Code), plus
(ii) the number two (2) plus the LESSER of clause (1) or (2)
of (i) above; provided, however, in no event shall the amount
computed under this (ii) exceed 200 percent of the lesser of clause
(1) or (2) of (i) above; OR
(iii) 125 percent of the LESSER of (1) the ADP of the group of
Non-Highly Compensated Employees eligible under the Plan (or other
arrangement of the Employer or Affiliated Employer that is subject
to Section 401(k) of the Code) for the Plan Year, or (2) the ACP of
the group of Non-Highly Compensated Employees under the Plan (or
other plan of the Employer or Affiliated Employer that is subject to
Section 401(m) of the Code) for the Plan Year beginning with the
Plan Year of the Plan (or other arrangement that is subject to
Section 401(k) of the Code), plus
::ODMA\PCDOCS\HOUSTON\998884\1
III-19
<PAGE>
(iv) the number two (2) plus the GREATER of clause (1) or (2)
of (iii) above; provided, however, in no event shall the amount
computed under this (iv) exceed 200 percent of the lesser of clause
(1) or (2) of (iii) above.
Notwithstanding the previous paragraph, multiple use of the
alternative limitation does not occur if (i) the ADP of the group of
Highly Compensated Employees does not exceed the product of 1.25
multiplied by the ADP of the group of Non-Highly Compensated Employees, or
(ii) the ACP of the group of Highly Compensated Employees does not exceed
the product of 1.25 multiplied by the ACP of the group of Non-Highly
Compensated Employees.
The ADP and ACP of the group of eligible Highly Compensated
Employees shall be determined after the use of all applicable
Contributions to meet the ADP test and after use of all applicable
Contributions to meet the requirements of the ACP test. In addition, the
ADP and the ACP of the group of eligible Highly Compensated Employees
shall be determined after any required corrective distribution of excess
deferrals, excess Employer Contributions or excess aggregate contributions
(described below), without regard to the rules hereunder relating to
multiple use of the alternative methods of compliance contained in this
subsection and Sections 401(k)(3)(A)(ii)(II) and 401(m)(2)(A)(ii) of the
Code.
If a multiple use of the alternative method of compliance with
Sections 401(k) and 401(m) occurs, in order to eliminate the multiple use
of such alternative method of compliance, the amount of the reduction to
the ADP of the entire group of eligible Highly Compensated Employees under
the Plan (and each other arrangement subject to Section 401(k) of the
Code) shall be calculated in the manner described in Section 3.3(h) of the
Plan and Section 1.401(k)-1(f)(2) of the Income Tax Regulations. Such
required reduction shall be treated as an excess contribution under the
arrangement subject to Section 401(k) of the Code. Instead of reducing the
actual deferral ratios of Highly Compensated Employees, the Employer may
eliminate the multiple use of the alternative limitation by making
Qualified Nonelective Contributions on behalf of Non-Highly Compensated
Employees (pursuant to Section 3.3(d)) within twelve (12) months after the
end of the Plan Year.
(l) EXCESS AGGREGATE CONTRIBUTIONS OVER ACP LIMITS: In the event
that with respect to any Plan Year, the aggregate amount of applicable
Contributions taken into account under the ACP test (set forth above) on
behalf of Highly Compensated Employees exceeds the maximum amount of such
Contributions permitted under the ACP test set out above (determined by
reducing such Contributions made on behalf of Highly Compensated Employees
in order of ACPs beginning with the highest of such percentages), then,
within two and one-half months from the end of the Plan Year or as soon as
practicable, but not later than the end of the Plan Year immediately
following the Plan Year to which any such excess
::ODMA\PCDOCS\HOUSTON\998884\1
III-20
<PAGE>
aggregate contributions pertain, as described below, such excess (plus
allocable income or loss) shall be forfeited, if forfeitable, or
distributed to Highly Compensated Employees on the basis of the respective
portions of such excess aggregate contributions attributable to each of
the Highly Compensated Employees as provided below. In lieu of forfeiture
or distribution of such excess aggregate contributions, within twelve (12)
months after the end of the Plan Year, the Employer may make Qualified
Nonelective Contributions on behalf of Non-Highly Compensated Employees
pursuant to Section 3.3(d) in an amount sufficient to satisfy the ACP test
for the Plan Year.
The amount of such excess aggregate contributions for a Highly
Compensated Employee for a Plan Year shall be determined by the following
leveling method, under which the actual contribution ratio of the Highly
Compensated Employee with the highest actual contribution ratio is reduced
to the extent required to (i) enable the Plan to satisfy the ACP test, or
(ii) cause such Highly Compensated Employee's actual contribution ratio to
equal the ratio of the Highly Compensated Employee with the next highest
actual contribution ratio. This leveling process shall be repeated until
the Plan satisfies the ACP test. For each Highly Compensated Employee, the
amount of such excess aggregate contributions is equal to the applicable
Contributions (described above) that were taken into account in computing
his actual contribution ratio (determined prior to the application of this
and the immediately preceding sentence), minus the amount determined by
multiplying such Employee's actual contribution ratio (determined after
application of this and the immediately preceding sentence) by his
Compensation used in determining such ratio. Any such excess aggregate
contributions shall be allocated to Members who are subject to the family
member aggregation rules of Section 414(q)(6) of the Code (described in
the third paragraph of the Highly Compensated Employee definition) in the
manner prescribed under Section 1.401(k)-l(f)(5) of the Income Tax
Regulations.
For purposes of this subsection, in accordance with Section
1.401(m)-1(e)(3)(ii)(C) of the Income Tax Regulations, income or loss that
is allocable to excess aggregate contributions (described above) for the
Plan Year shall be the income or loss allocable to the applicable
Contributions (described above) used in the ACP test multiplied by a
fraction. The numerator of this fraction is the Member's excess aggregate
contributions for the Plan Year. The denominator is the balance in the
Member's Account to the extent used in the ACP test as of the beginning of
the Plan Year, plus the applicable Contributions (described above) used in
the ACP test for the Plan Year. No income or loss will be allocated for
the gap period between the end of the Plan Year and the date of
distribution for Plan Years beginning on or after January 1, 1992 and,
with respect to Plan Years beginning before such date, income or loss
shall be allocated in accordance with the Income Tax Regulations and Plan
document as then in effect.
::ODMA\PCDOCS\HOUSTON\998884\1
III-21
<PAGE>
The Administrative Committee (on or before the fifteenth day of the
third month following the end of the Plan Year but, in any event, before
the end of the next Plan Year) shall direct the Trustee to distribute to
the Highly Compensated Employee having the highest actual contribution
ratio, his portion of the excess aggregate contributions (and income
allocable thereto) or, if forfeitable, forfeit such non-vested excess
aggregate contributions attributable to Matching Contributions (and income
allocable thereto) pursuant to Section 4.6. This process shall be repeated
until the ACP test is satisfied, or until the actual contribution ratio of
such Highly Compensated Employee equals the actual contribution ratio of
the Highly Compensated Employee having the next highest actual
contribution ratio. Vested Matching Contributions may not be forfeited to
correct excess aggregate contributions; provided, however, an otherwise
vested Matching Contribution may be forfeited if the Salary Reduction
Contribution to which such Matching Contribution relates is an excess
contribution (above the ADP limits of Section 401(k)(3) of the Code) or an
excess deferral (above the annual dollar limit of Section 402(g) of the
Code). The forfeiture or distribution of excess aggregate contributions
(and allocable income) shall be made in the following order:
(i) Forfeiture of non-vested Matching Contributions, if any; and
(ii) Distribution of vested Matching Contributions, if any.
Forfeitures of excess aggregate contributions (and income allocable
thereto) shall be administered in accordance with Section 4.6; provided,
however, if forfeitures are allocated to Members under Section 4.6, no
forfeitures may be allocated to a Highly Compensated Employee whose excess
aggregate contributions were reduced pursuant to the previous paragraph.
Excess aggregate contributions are still counted as Employer
Contributions, for purposes of Sections 404 and 415 of the Code, for the
Plan Year when made, even if distributed from the Plan. In addition,
forfeitures of excess Matching Contributions to satisfy the ACP test are
still counted as annual additions under Section 415 of the Code for the
Plan Year when made on behalf of the applicable Highly Compensated
Employees from whose Accounts such amounts were forfeited. If forfeitures
are re-allocated to Members' Accounts pursuant to Section 4.6, such
forfeitures are also treated as annual additions under Section 415 of the
Code on behalf of such Members for the Plan Year in which such amounts are
re-allocated.
(m) MANDATORY DISAGGREGATION OF CERTAIN PLANS: Notwithstanding any
provision of this Section 3.3 to the contrary, the Plan shall be operated
in accordance with Section 1.401(k)-1(g)(11) of the Income Tax Regulations
concerning mandatory disaggregation of certain types of plans. Subject to
all the requirements of Section 1.401(k)-1(g)(11)(iii) of the
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
Income Tax Regulations, the following plans shall be treated as comprising
separate plans:
(i) PLANS BENEFITING COLLECTIVE BARGAINING UNIT employees. A
plan that benefits employees who are included in a unit of employees
covered by a collective bargaining agreement and employees who are
not included in such a collective bargaining unit is treated as
comprising separate plans.
(ii) ESOPS AND NON-ESOPS. For Plan Years beginning on or after
January 1, 1991, the portion of a plan that is an employee stock
ownership plan described in Section 4975(e) or 409 of the Code (an
ESOP) and the portion of the plan that is not an ESOP are treated as
separate plans, except as otherwise permitted under Section
54.4975-11(e) of the Income Tax Regulations.
(iii) PLANS BENEFITING EMPLOYEES OF QUALIFIED SEPARATE LINES
OF BUSINESS. If an Employer is treated as operating qualified
separate lines of business for purposes of Section 410(b) of the
Code, the portion of a plan that benefits employees of one qualified
separate line of business is treated as a separate plan from the
portions of the same plan that benefit employees of the other
qualified separate lines of business of the Employer.
(iv) PLANS MAINTAINED BY MORE THAN ONE EMPLOYER--
(1) MULTIPLE EMPLOYER PLANS. If a plan benefits
employees of more than one Employer and the employees are not
included in a unit of employees covered by a collective
bargaining agreement (a multiple employer plan), the plan is
treated as comprising separate plans each of which is
maintained by a separate Employer.
(2) MULTIEMPLOYER PLANS. The portion of a plan that
benefits employees who are included in a collective bargaining
unit, the portion of a plan that benefits employees who are
included in another collective bargaining unit and the portion
of a plan that benefits non-collective bargaining unit
employees are all treated as separate plans. Consistent with
Section 413(b) of the Code, the portion of a plan that is
maintained pursuant to a collective bargaining agreement is
treated as a single plan maintained by a single employer that
employs all the employees benefiting under the same benefit
computation formula and covered pursuant to that collective
bargaining agreement. The non-collectively bargained portion
of the plan is treated as maintained by one or more employers,
depending on whether the non-collective bargaining unit
employees who benefit under the plan are employed by one or
more employers.
::ODMA\PCDOCS\HOUSTON\998884\1
III-23
<PAGE>
3.4 COMPOSITION OF AND DEADLINE FOR PAYMENT OF EMPLOYER Contributions:
Employer Contributions shall be paid to the Trustee in cash. Any Salary
Reduction Contributions made pursuant to Salary Reduction Agreements for the
Plan Year shall be paid to the Trustee (in installments based on the Employer's
pay period and in an amount equal to the amount by which all Members' Considered
Compensation was reduced pursuant to Compensation Deferral Agreements applicable
to the pay period) not later than thirty (30) days after the end of the
Employer's pay period to which such Contributions are attributable, while all
other Contributions of an Employer for each Plan Year shall be paid to the
Trustee in one or more installments as the Administrative Committee may from
time to time determine; provided, however, the Contribution may be paid not
later than the time prescribed by law for filing the Employer's federal income
tax return (including extensions thereof) for such Employer's taxable year
ending with or within the Plan Year if (i) the Contribution is treated by the
Plan in the same manner that the Plan would treat a Contribution actually
received on the last day of such taxable year and (ii) either of the following
conditions are satisfied: (1) the Employer designates the Contribution in
writing to the Trustee as a payment on account of such taxable year, or (2) the
Employer claims such Contribution as a deduction on its federal income tax
return for such taxable year; and, further provided, that to the extent required
under regulations or other authority prescribed by the appropriate governmental
authority, any Contributions (other than Salary Reduction Contributions) which
are to be taken into account for purposes of determining the ADP or ACP (defined
in Section 3.3) shall be paid to the Trustee not later than the last day of the
12-month period that immediately follows the end of the Plan Year to which such
Contributions pertain.
3.5 RETURN OF CONTRIBUTIONS FOR MISTAKE, DISQUALIFICATION OR DISALLOWANCE
OF DEDUCTION: The assets of the Trust Fund shall in no event be paid to or
revert to any Employer or be used for any purpose other than the exclusive
benefit of the Members and their Beneficiaries and the reasonable expenses of
administering the Plan except that:
(a) If an Employer makes a Contribution by mistake of fact, such
mistaken Contribution may revert and be repaid to the Employer within one
year after the payment of the Contribution;
(b) The Employer's Contribution for each Plan Year is conditioned on
the Plan's initial qualification under Section 401 of the Code and the
Employer's Contribution may revert and be repaid to the Employer within
one year after the date of denial of the initial qualification of the
Plan; and
(c) The Employer's Contribution is conditioned upon the
deductibility thereof under Section 404 of the Code and, to the extent the
deduction is disallowed, the Contribution may revert and be repaid to the
Employer within one year after the disallowance of the deduction.
In any case hereinabove described in clauses (a), (b), or (c) of this
Section, the Employer shall, subject to the limitations set forth below, have
exclusive authority and absolute discretion to
::ODMA\PCDOCS\HOUSTON\998884\1
III-24
<PAGE>
determine whether a Contribution, or any part thereof, shall revert and be
repaid to it or shall instead remain a part of the Trust Fund. The amount which
may be repaid to the Employer under clauses (a) or (c) of this Section may not
exceed the excess of (i) the amount contributed over (ii) the amount that would
have been contributed had there not occurred a mistake of fact or a mistake in
determining the deduction. Earnings attributable to such excess contribution
shall not be repaid, and losses attributable thereto shall reduce the amount
which may be returned. If the repayment of the amount attributable to the
mistaken Contribution would cause the balance of any Member's Account to be
reduced to less than the balance which would have been in the Account had the
mistaken amount not been contributed, then the amount which may be repaid to the
Employer shall be limited so as to avoid such reduction.
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
ARTICLE IV
PARTICIPATION
4.1 PERIODIC CERTIFICATION BY EMPLOYER: As soon as practicable after each
Plan Year (or such shorter period as may be prescribed by the Administrative
Committee), each Employer shall certify to the Administrative Committee the
amount of any Salary Reduction, Matching, Qualified Nonelective, and/or Profit
Sharing Contributions that it made for the period then ended, the names of its
Members entitled to share in each type of Contribution, the number of years of
Active Service of its Members, the amount of Considered Compensation paid to
each such Member for such period, and the amount of Considered Compensation paid
to all its Members for such period. Such certification shall be conclusive
evidence of such facts.
4.2 ALLOCATION OF EMPLOYER CONTRIBUTIONS:
(a) SALARY REDUCTION CONTRIBUTIONS: As of the end of each pay period
to which Salary Reduction Contributions apply, Salary Reduction
Contributions authorized by the Member for such pay period pursuant to a
Salary Reduction Agreement (and permitted under applicable provisions of
the Plan to be made by the Employer on behalf of the Member) shall be
allocated to the Member's Employer Nonforfeitable Contributions Account.
(b) MATCHING CONTRIBUTIONS: As of the last day of each Plan Year (or
such shorter period as may be prescribed by the Administrative Committee)
to which any Matching Contributions apply, Matching Contributions
described in Section 3.3(b) shall be allocated to the appropriate Member's
Employer Contributions Account.
(c) PROFIT SHARING CONTRIBUTIONS: As of the end of the Plan Year (or
any other period) to which any Profit Sharing Contribution applies, the
Administrative Committee shall allocate any Profit Sharing Contribution
(made in accordance with applicable provisions of Section 3.3(c)) among
each Member who satisfies the requirements of Section 3.3(c) in the
proportion that the total Considered Compensation of each such Member for
such Plan Year bears to the total Considered Compensation for all such
Members for such Plan Year, and shall credit each such Member's
proportionate share to the Member's Employer Nonforfeitable Contributions
Account and/or Employer Contributions Account, as specified in resolutions
adopted by the Board and communicated to Members; provided, however,
absent such specification, the Administrative Committee shall credit each
Member's proportionate share to the Member's Employer Contributions
Account. Notwithstanding the previous sentence, any portion of any Profit
Sharing Contribution which is designated by the Board as an additional
Matching Contribution shall be allocated among each Member who satisfies
the requirements of Section 3.3(c) in the same ratio that the Member's
Salary Reduction Contributions
::ODMA\PCDOCS\HOUSTON\998884\1
IV-1
<PAGE>
for the Plan Year bears to the total Salary Reduction Contributions by all
eligible Members for the Plan Year.
(d) QUALIFIED NONELECTIVE CONTRIBUTIONS: As of the end of the Plan
Year to which any Qualified Nonelective Contribution applies, the
Administrative Committee shall allocate the Qualified Nonelective
Contribution for the Plan Year (made in accordance with applicable
provisions of Section 3.3(d)) among each eligible Member who satisfies the
requirements of Section 3.3(d) in the proportion that total Considered
Compensation of each such Member for the Plan Year bears to total
Considered Compensation for all such Members for such Plan Year, and shall
credit each such Member's proportionate share to the Member's Employer
Nonforfeitable Contributions Account.
(e) TOP-HEAVY MINIMUM CONTRIBUTION: Notwithstanding any other
provision of the Plan to the contrary, if the Plan is a Top-Heavy Plan
described in Article VII for the Plan Year, such portion of the Employer's
Contribution (made pursuant to applicable provisions of Section 3.3(f))
shall be allocated among the Employer's Members who are in its employ at
the end of the Plan Year (including Members who, except for Section 7.4(f)
of the Plan, may not otherwise be entitled to share in the allocation) as
may be required to ensure that each such Member is credited with an amount
which when added to any other portion of the Employer Contribution
allocated to his Account will equal the minimum allocation required under
Section 7.3(c) of the Plan. Any such amount allocated hereunder shall be
specially allocated pursuant hereto and credited to the Member's Employer
Contributions Account.
(f) RESTORATION OF FORFEITED AMOUNTS: The Administrative Committee
shall allocate any Employer Contribution (made in accordance with
applicable pro visions of Section 3.3(e) to restore an Account in
accordance with the requirements of Section 4.6) to the Account required
to be restored under applicable provisions of Section 4.6. The
Administrative Committee shall temporarily hold any Employer Contribution
(made in accordance with Section 3.3 to restore an Account in accordance
with the requirements of Section 6.7) in an unallocated distribution
account until it can be paid out in accordance with Section 6.7.
Distribution from the unallocated distribution account to the appropriate
person shall be made as soon as practicable.
If a Member has been Transferred during a pay period or the Plan
Year, such Member shall be entitled to have allocated to his Account a
portion of the Employer Contribution made by each Employer by whom such
Member was employed during such pay period or Plan Year, and such Member's
share of each Employer's Contribution shall be computed with respect to
each such Employer in the manner hereinabove provided.
::ODMA\PCDOCS\HOUSTON\998884\1
IV-2
<PAGE>
4.3 LIMITATION ON ADDITIONS TO ACCOUNT:
Capitalized terms used in this Section which are not otherwise defined in
Article I of the Plan are defined in Section 4.3(d).
(a) MEMBER COVERED SOLELY IN THIS PLAN: This Section 4.3(a) applies
only if the Member does not participate in, and has never participated in,
another qualified plan, a welfare benefit fund, as defined in Section
419(e) of the Code, or an individual medical account, as defined in
Section 415(l)(2) of the Code, maintained by the Employer, which provides
an Annual Addition.
(i) If the Member does not participate in, and has never
participated in another qualified plan, a welfare benefit fund, as
defined in Section 419(e) of the Code, or an individual medical
account, as defined in Section 415(l)(2) of the Code, maintained by
the Employer, the amount of Annual Additions which may be credited
to the Member's Account as of any allocation date for any Limitation
Year will not exceed the lesser of (1) the Maximum Permissible
Amount or (2) any other limitation contained in the Plan. If the
Employer Contribution that would otherwise be contributed or
allocated to the Member's Account would cause the Annual Additions
for the Limitation Year to exceed the Maximum Permissible Amount,
the amount contributed or allocated will be reduced so that the
Annual Additions for the Limitation Year will equal the Maximum
Permissible Amount.
(ii) Prior to the determination of the Member's actual
compensation for a Limitation Year, the Employer may determine the
Maximum Permissible Amount on the basis of a reasonable estimation
of the Member's annual Compensation for such Limitation Year,
uniformly determined for all Members similarly situated.
(iii) As soon as is administratively feasible after the end of
the Limitation Year, the Maximum Permissible Amount for such
Limitation Year shall be determined on the basis of the Member's
actual Compensation for such Limitation Year.
(iv) Subject to the last paragraph of this subsection (iv) in
the event of excess Salary Reduction Contributions, pursuant to
Section 1.415-6(b)(6) of the Income Tax Regulations, if, as a result
of the allocation of forfeitures, a reasonable error in estimating a
Member's annual compensation, a reasonable error in determining the
amount of elective deferrals (within the meaning of Section 3.1 of
the Plan and Section 402(g)(3) of the Code) that may be made with
respect to a Member under the limits of Section 415 of the Code, or
any other facts and circumstances as the
::ODMA\PCDOCS\HOUSTON\998884\1
IV-3
<PAGE>
Internal Revenue Service determines justify the availability of this
Section 4.3(a)(iv), there is an Excess Amount with respect to a
Member for a Limitation Year, such Excess Amount shall be disposed
of as follows:
(1) First, if the Member is in the service of the
Employer at the end of the Limitation Year, then such Excess
Amounts in the Member's Account must not be distributed to the
Member, but shall be reallocated to a temporary suspense
account and shall be reapplied to reduce future Employer
Contributions under the Plan for such Member in the next
Limitation Year, and for each succeeding Limitation Year, if
necessary.
(2) If after application of Section 4.3(a)(iv)(1) an
Excess Amount still exists, and the Member is not in the
service of the Employer at the end of the Limitation Year,
then such Excess Amounts in the Member's Account must not be
distributed to the Member, but shall be reallocated to a
temporary suspense account and shall be reapplied to reduce
future Employer Contributions for all remaining Members in the
next Limitation Year and each succeeding Limitation Year if
necessary.
(3) If a temporary suspense account is in existence at
any time during the Limitation Year pursuant to this Section,
it will not participate in the allocation of the Trust Fund's
investment gains and losses. If a temporary suspense account
is in existence at any time during a Limitation Year, all
amounts in the suspense account must be applied as set forth
above before any Employer Contributions may be made to the
Plan for that Limitation Year. Excess Amounts may not be
distributed to Members or former Members.
Notwithstanding the preceding provisions of this subsection
(iv), if due to a reasonable error in determining the amount of
Salary Reduction Contributions that may be made within the limits of
Section 415 of the Code, in accordance with Section 1.415-6(b)(6) of
the Income Tax Regulations, the Plan shall distribute Salary
Reduction Contributions to the extent that such distribution reduces
the Excess Amount. Any such amounts distributed shall not be taken
into account for purposes of computing (i) the dollar limit on
Salary Reduction Contributions under Section 3.1 of the Plan and
Section 402(g) of the Code, (ii) the ADP test under Section 3.3 of
the Plan and Section 401(k)(3) of the Code, and (iii) the ACP test
under Section 3.3 of the Plan and Section 401(m)(2) of the Code.
::ODMA\PCDOCS\HOUSTON\998884\1
IV-4
<PAGE>
(b) MEMBER COVERED UNDER ANOTHER DEFINED CONTRIBUTION PLAN: This
Section 4.3(b) applies if, in addition to the Plan, the Member is covered
under another qualified plan which is a defined contribution plan, a
welfare benefit fund, as defined in Section 419(e) of the Code, or an
individual medical account, as defined in Section 415(l)(2) of the Code,
maintained by the Employer during any Limitation Year, which provides an
Annual Addition during the Limitation Year.
(i) The Annual Additions which may be credited to a Member's
Account under the Plan for any such Limitation Year will not exceed
the lesser of (1) the Maximum Permissible Amount reduced by the
Annual Additions credited to a Member's account under the other
plans, welfare benefit funds and individual medical accounts for the
same Limitation Year or (2) any other limitation contained in the
Plan. If the Annual Additions with respect to the Member under other
defined contribution plans, welfare benefit funds, and individual
medical accounts, maintained by the Employer are less than the
Maximum Permissible Amount and the Employer Contribution that would
otherwise be contributed or allocated to the Member's Account under
the Plan would cause the Annual Additions for the Limitation Year to
exceed this limitation, the amount contributed or allocated will be
reduced so that the Annual Additions under all such plans and funds
for the Limitation Year will equal the Maximum Permissible Amount.
If the Annual Additions with respect to the Member under such other
defined contribution plans, welfare benefit funds, and individual
medical accounts, in the aggregate, are equal to or greater than the
Maximum Permissible Amount, no amount will be contributed or
allocated to the Member's Account under the Plan for the Limitation
Year.
(ii) Prior to determining the Member's actual Compensation for
the Limitation Year, the Employer may determine the Maximum
Permissible Amount in the manner described in Section 4.3(a)(ii).
(iii) As soon as is administratively feasible after the end of
the Limitation Year, the Maximum Permissible Amount for the
Limitation Year shall be determined on the basis of the Member's
actual Compensation for such Limitation Year.
(iv) Pursuant to Section 1.415-6(b)(6) of the Income Tax
Regulations, if, as a result of the allocation of forfeitures, a
reasonable error in estimating a Member's annual compensation, a
reasonable error in determining the amount of elective deferrals
(within the meaning of Section 3.1 of the Plan and Section 402(g)(3)
of the Code) that may be made with respect to a Member under the
limits of Section 415 of the Code, or any other facts and
circumstances as the Internal Revenue Service determines justify
::ODMA\PCDOCS\HOUSTON\998884\1
IV-5
<PAGE>
the availability of this Section 4.3(b)(iv), a Member's Annual
Additions under the Plan and all such other plans result in an
Excess Amount, such Excess Amount shall be deemed to consist of the
Annual Additions last allocated, except that Annual Additions
attributable to a welfare benefit fund will be deemed to have been
allocated first regardless of the actual allocation date.
(v) If an Excess Amount was allocated to a Member's Account on
an allocation date of the Plan which coincides with an allocation
date of another plan, the Excess Amount attributed to the Plan will
be the product of:
(1) the total Excess Amount allocated as of such date,
multiplied by
(2) the ratio of (A) the Annual Additions allocated to
the Member's Account for the Limitation Year as of such date
under the Plan, divided by (B) the total Annual Additions
allocated to the Member's Account for the Limitation Year as
of such date under the Plan and all qualified defined
contribution plans.
(vi) Any Excess Amounts attributed to the Plan shall be
disposed of as provided in Section 4.3(a)(iv).
If due to a reasonable error in determining the amount of
Salary Reduction Contributions that may be made within the limits of
Section 415 of the Code, in accordance with Section 1.415-6(b)(6) of
the Income Tax Regulations, the Plan shall distribute Salary
Reduction Contributions to the extent that such distribution reduces
the Excess Amount. Any such amounts distributed shall not be taken
into account for purposes of computing (i) the dollar limit on
Salary Reduction Contributions under Section 3.1 of the Plan and
Section 402(g) of the Code, (ii) the ADP test under Section 3.3 of
the Plan and Section 401(k)(3) of the Code, and (iii) the ACP test
under Section 3.3 of the Plan and Section 401(m)(2) of the Code.
(c) MEMBER COVERED UNDER DEFINED BENEFIT PLAN: If the Employer
maintains, or at any time maintained, a qualified defined benefit plan
covering any Member of the Plan, the sum of the Member's Defined Benefit
Fraction and Defined Contribution Fraction will not exceed 1.0. For
purposes of this Section 4.3, all defined contribution plans of an
Employer are to be treated as one defined contribution plan and all
defined benefit plans of an Employer are to be treated as one defined
benefit plan, whether or not such plans have been terminated. If the sum
of the Defined Contribution Fraction and Defined Benefit Plan Fraction
exceeds 1.0, the rate of accrual of the annual benefit of the defined
benefit plan(s) will be reduced so that the sum of the fractions will not
exceed 1.0. In no event will the annual
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
benefit be decreased below the amount of the accrued benefit to date. If
additional reductions are required for the sum of the fractions to equal
1.0, the reductions will then be made to the Annual Additions of the
defined contribution plans. If the defined benefit plan does not contain
provisions which correspond to this provision, the Annual Addition to the
defined contribution plans for the Limitation Year will be reduced so that
the sum of the fractions will not exceed 1.0.
(d) DEFINITIONS: For purposes of this Section 4.3, the following
terms shall be defined as follows:
(i) ANNUAL ADDITION -- With respect to any Member, an Annual
Addition for the Limitation Year shall be the sum of (1) all
Employer Contributions allocated to his Account; (2) any forfeitures
allocated to his Account; and (3) the amount of any nondeductible,
after-tax employee contributions allocated to his Account. Moreover,
any Excess Amounts applied under Section 4.3(a)(iv) or 4.3(b)(vi)
during the Limitation Year to reduce Employer Contributions shall be
considered to be Annual Additions for such Limitation Year. Subject
to the correction rules of Section 4.3(a)(iv), Contributions do not
fail to be Annual Additions merely because they are excess deferrals
(described in Section 3.1(c) of the Plan), excess contributions
above the ADP limits (described in Section 3.3(h) of the Plan), or
excess aggregate contributions above the ACP limits (described in
Section 3.3(j) of the Plan); provided, however, excess deferrals
which are timely distributed by April 15 following the year of
deferral to the applicable Member pursuant to Section 3.1(d) of the
Plan are not Annual Additions.
Amounts allocated, after March 31, 1984, to an individual
medical account, as defined in Section 415(l) of the Code, which is
part of a defined benefit plan maintained by the Employer, are
treated as Annual Additions to a defined contribution plan. Also,
amounts derived from contributions paid or accrued after December
31, 1985, in taxable years ending after such date, which are
attributable to postretirement medical benefits allocated to the
separate account of a key employee, as defined in Section 419A(d)(3)
of the Code, under a welfare benefit fund, as defined in Section
419(e) of the Code, maintained by the Employer, are treated as
Annual Additions to a defined contribution plan. The Annual Addition
for any Limitation Year beginning before January 1, 1987 shall not
be recomputed to treat all Employee Contributions as Annual
Additions.
(ii) COMPENSATION -- For each Limitation Year commencing after
December 31, 1989, a Member's wages (as defined in Section 3401(a)
of the Code for purposes of income tax withholding at the source)
that are paid (within the meaning of Section 1.415-2(d)(3) and (4)
of the Income Tax
::ODMA\PCDOCS\HOUSTON\998884\1
IV-7
<PAGE>
Regulations) to the Member by the Employer during the Limitation
Year for services performed and reportable on the Member's form W-2
(or its successor), 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) of the Code).
For each Limitation Year commencing prior to January 1, 1990,
Compensation for purposes of this Section shall be defined by
reference to Section 1.415-2(d)(1) and (2) of the Income Tax
Regulations.
(iii) DEFINED BENEFIT FRACTION -- A fraction, the numerator of
which is the sum of the Member's Projected Annual Benefits under all
the defined benefit plans (whether or not terminated) maintained by
the Employer and, subject to application of Section 416(h) of the
Code and Article VII of the Plan relating to Top-Heavy Plans, the
denominator of which is the lesser of 125 percent of the dollar
limitation in effect for the Limitation Year under Section
415(b)(1)(A) and Section 415(d) of the Code or 140 percent of the
Highest Average Compensation, including any adjustments under
Section 415(b) of the Code.
Notwithstanding the above, if the Member was a Member as of
the first day of the first Limitation Year beginning after December
31, 1986, in one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986, the denominator of
this fraction will not be less than 125 percent of the sum of the
annual benefits under such plans which the Member had accrued as of
the close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the
Plan after May 5, 1986. The preceding sentence applies only if the
defined benefit plans individually and in the aggregate satisfied
the requirements of Section 415 of the Code for all Limitation Years
beginning before January 1, 1987.
(iv) DEFINED CONTRIBUTION FRACTION -- A fraction, the
numerator of which is the sum of the Annual Additions to the
Member's account under all the defined contribution plans (whether
or not terminated) maintained by the Employer for the current and
all prior Limitation Years (including the Annual Additions
attributable to the Member's nondeductible employee contributions to
all defined benefit plans, whether or not terminated, maintained by
the Employer, and the Annual Additions to all welfare benefit funds
as defined in Section 419(e) of the Code, and individual medical
accounts as defined in Section 415(l)(2) of the Code, maintained by
the Employer), 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 Employer
::ODMA\PCDOCS\HOUSTON\998884\1
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(regardless of whether a defined contribution plan was maintained by
the Employer). Subject to application of Section 416(h) of the Code
and Article VII of the Plan relating to Top-Heavy Plans, the Maximum
Aggregate Amount in any Limitation Year is the lesser of 125 percent
of the dollar limitation in effect under Section 415(c)(1)(A) of the
Code or 35 percent of the Member's Compensation for such year.
If the Member was a Member as of the end of the first day of
the first Limitation Year beginning after December 31, 1986, in one
or more defined contribution plans maintained by the Employer which
were in existence on May 6, 1986, the numerator of this fraction
will be adjusted if the sum of this fraction and the Defined Benefit
Fraction would otherwise exceed 1.0 under the terms of the Plan.
Under the adjustment, an amount equal to the product of (1) the
excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently subtracted from
the numerator of this fraction. The adjustment is calculated using
the fractions as they would be computed as of the end of the last
Limitation Year beginning before January 1, 1987, and disregarding
any changes in the terms and conditions of the Plan made after May
5, 1986, but using the Code Section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat any Employee
Contributions as Annual Additions.
(v) EMPLOYER -- The Employer that adopts the Plan. In the case
of a group of Employers which constitutes a controlled group of
corporations (as defined in Section 414(b) of the Code as modified
by Section 415(h) of the Code) or which constitutes trades or
businesses (whether or not incorporated) which are under common
control (as defined in Section 414(c) as modified by Section 415(h)
of the Code) or all members of an affiliated service group (as
defined in Section 414(m) of the Code) or any other entity required
to be aggregated with the Employer pursuant to regulations under
Section 414(o) of the Code, all such Employers shall be considered a
single Employer for purposes of applying the limitations of this
Section 4.3.
(vi) EXCESS AMOUNT -- The excess of the Annual Additions
credited to the Member's Account for the Limitation Year over the
Maximum Permissible Amount.
(vii) HIGHEST AVERAGE COMPENSATION -- The average compensation
for the three consecutive years of service with the Employer that
produces the
::ODMA\PCDOCS\HOUSTON\998884\1
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highest average. A year of service with the Employer is the
12-consecutive-month period which corresponds with the Limitation
Year.
(viii)LIMITATION YEAR -- The 12-consecutive-month period which
begins on the first day of the Plan Year and anniversaries thereof.
All qualified plans maintained by the Employer must use the same
Limitation Year. If the Limitation Year is amended to a different
12-consecutive- month period, the new Limitation Year must begin on
a date within the Limitation Year in which the amendment is made.
(ix) MAXIMUM PERMISSIBLE AMOUNT -- The Maximum Permissible
Amount with respect to any Member shall be the lesser of (1) $30,000
(or, if greater, one-fourth of the defined benefit dollar limitation
set forth in Section 415(b)(1) of the Code as in effect for the
Limitation Year) or (2) except as otherwise provided below, 25
percent of his actual Compensation for the Limitation Year.
Effective on January 1 of the calendar year prescribed in Section
415(d) of the Code and each January 1 thereafter, the $30,000
limitation above will be automatically adjusted to the new dollar
limitation determined by the Commissioner of Internal Revenue for
that calendar year in accordance with applicable provisions of
Sections 415(b), 415(c) and 415(d) of the Code. The new limitation
will apply to Limitation Years ending within the calendar year of
the date of the adjustment. The 25 percent of actual Compensation
limitation referred to above shall not apply to any contribution for
medical benefits (within the meaning of Section 401(h) or Section
419A(f)(2) of the Code) after separation from service which is
otherwise treated as an Annual Addition, or to any other amount
otherwise treated as an Annual Addition under Section 415(l)(1) or
Section 419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment
changing the limitation to a different 12-consecutive-month period,
the Maximum Permissible Amount shall not exceed the defined
contribution dollar limitation for the short Limitation Year
determined as follows: the dollar limitation in effect for the
calendar year in which the short Limitation Year ends will be
multiplied by a fraction, the numerator of which is the number of
months in the short Limitation Year, and the denominator of which is
12.
(x) PROJECTED ANNUAL BENEFIT -- A Member's annual retirement
benefit (adjusted to the actuarial equivalent of a straight life
annuity if expressed in a form other than a straight life or
qualified joint and survivor annuity) to which the Member would be
entitled under the respective plan, assuming that the Member will
continue employment until the later of current
::ODMA\PCDOCS\HOUSTON\998884\1
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age or normal retirement age under the respective plan, and that the
participant's compensation for the current Limitation Year and all
other relevant factors used to determine benefits under the
respective plan will remain constant for all future Limitation
Years.
4.4 PERIODIC VALUATION OF TRUST FUND: Subject to Section 4.10 (regarding
investment elections in individual investment funds) and the last paragraph of
this Section, at the end of each Plan Year (or such shorter accounting period as
may be prescribed by the Administrative Committee) the Trustee shall revalue the
Trust Fund at its then fair market value, determine the amount of income or loss
and appreciation or depreciation of the Trust Fund for the applicable accounting
period then ended, and certify such information to the Administrative Committee.
Subject to Section 4.10, with respect to Members' Accounts, the balances of
which have not been withdrawn, distributed or otherwise paid pursuant to
applicable provisions of the Plan as of the last day of the applicable
accounting period, the Administrative Committee shall allocate such income or
loss and appreciation or depreciation of the Trust Fund to each Member's Account
(without regard to whether the Member is employed by the Employer at the end of
the applicable accounting period) in the ratio that the balance credited to each
Member's Account as of the first day of the applicable accounting period bears
to the total of the balances credited to all such Members' Accounts as of the
first day of the applicable accounting period. The Administrative Committee
shall then allocate the income or loss and any appreciation or depreciation
among each Member's individual accounts maintained under his Account in the
ratio that the balance credited to each individual account as of the first day
of the applicable accounting period bears to the total balance credited to his
Account as of the first day of the applicable accounting period.
Prior to the allocations described in this Section and subject to Section
4.10, Account balances shall be reduced as appropriate by forfeitures,
withdrawals, payments or distributions, or other amounts properly chargeable to
Members' Accounts under the Plan during the applicable accounting period.
Notwithstanding the above, solely for purposes of the allocations made under
this Section pursuant to uniformly applied nondiscriminatory rules which may be
established by the Administrative Committee, on or after the first day of the
applicable accounting period, any Rollover Contributions credited to the
Member's Employee Rollover Account, any direct transfers credited to the
Member's Prior Plan Account, and/or any other Contributions credited to the
Member's Account, shall be taken into account to ensure that such amounts
transferred or contributed to the Plan share in the allocations hereunder with
respect to such accounting period; provided, however, the Administrative
Committee shall not be required to establish any such rules.
Notwithstanding the preceding paragraphs of this Section, allocations of
income or loss and depreciation or depreciation of the Trust Fund to each
Member's Account shall be made on a consistent and nondiscriminatory basis under
the applicable provisions of the Plan document as in effect at the time of each
allocation.
4.5 EXTRAORDINARY VALUATION OF TRUST FUND: Subject to Section 4.10
(regarding investment elections in individual investment funds) and the last
paragraph of this Section, at any
::ODMA\PCDOCS\HOUSTON\998884\1
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time or times during a Plan Year that one or more of the Members become eligible
for a distribution hereunder or request a withdrawal in accordance with
applicable provisions of Article VI, and the Administrative Committee determines
that because of such distribution or withdrawal, a revaluation of the Trust
Fund, a determination of the Trust Fund's income or loss, and an interim
allocation are necessary to prevent discrimination against those Members who
have not requested a distribution or withdrawal, the Trustee shall revalue the
Trust Fund, as of a date selected by the Administrative Committee (which is
administratively practical and is near the date of distribution or withdrawal),
at its then fair market value, determine the amount of income earned or loss
suffered by the Trust Fund for the period then ended, and certify such
information to the Administrative Committee.
Subject to Section 4.10, with respect to Members' Accounts, the balances
of which have not been withdrawn, distributed or otherwise paid pursuant to
applicable provisions of the Plan as of the date that an extraordinary valuation
is required, the Administrative Committee shall allocate such income or loss and
appreciation or depreciation of the Trust Fund to each Member's Account (without
regard to whether the Member is employed by the Employer on the date that an
extraordinary valuation is required) in the ratio that the balance credited to
each Member's Account as of the first day of the applicable accounting period
bears to the total of the balances credited to all such Members' Accounts as of
the first day of the applicable accounting period. The Administrative Committee
shall then allocate the income or loss and appreciation or depreciation which
was allocated to each Member's Account among each Member's individual accounts
maintained under his Account in the ratio that the balance credited to each
individual account as of the first day of the applicable accounting period bears
to the total balance credited to his Account as of the first day of the
applicable accounting period.
Prior to the allocations described in this Section and subject to Section
4.10, Account balances shall be reduced as appropriate by forfeitures,
withdrawals, payments or distributions, or other amounts properly chargeable to
Members' Accounts during the applicable accounting period. Notwithstanding the
above, solely for purposes of the allocations made under this Section pursuant
to uniformly applied nondiscriminatory rules which may be established by the
Administrative Committee, on or after the first day of the applicable accounting
period, any Rollover Contributions credited to the Member's Employee Rollover
Account, any direct transfer allocated to the Member's Prior Plan Account,
and/or any other Contributions credited to the Member's Account, shall be taken
into account to ensure that such amounts transferred or contributed to the Plan
share in the allocations hereunder with respect to such accounting period;
provided, however, the Administrative Committee shall not be required to
establish any such rules.
Notwithstanding the preceding paragraphs of this Section, allocations of
income or loss and depreciation or depreciation of the Trust Fund to each
Member's Account shall be made on a consistent and nondiscriminatory basis under
the applicable provisions of the Plan document as in effect at the time of each
allocation.
4.6 FORFEITURES AND ALLOCATION THEREOF:
::ODMA\PCDOCS\HOUSTON\998884\1
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(a) GENERAL RULE: In the event that a Member terminates employment
with any Employer and all Affiliated Employers, his vested interest in his
Account will be paid (or deemed to be paid in the case of a nonvested
Member, as described below) in accordance with this Section and Section
6.6, and any nonvested amount shall be forfeited at such time as is
provided under subsequent provisions of this Section. Not later than the
last day of the Plan Year in which such distribution (or deemed
distribution) occurred, such forfeiture shall be applied first to
reinstate any Account required to be reinstated during the Plan Year under
the subsequent provisions of this Section, and any remaining forfeitures
shall then be applied to by the Administrative Committee reduce any
subsequent Contributions of the Employer which contributed with respect to
the amounts forfeited or to pay administrative expenses of the Plan to the
extent not inconsistent with ERISA.
(b) ACTUAL AND DEEMED CASH-OUTS OF NONVESTED OR PARTIALLY VESTED
ACCOUNTS WITHIN TWO PLAN YEARS AFTER THE MEMBER'S TERMINATION OF
EMPLOYMENT; REINSTATEMENT OF SUCH ACCOUNTS: With respect to any Member who
terminates employment with any Employer and all Affiliated Employers and
who (i) either (A) has a zero percent (0%) vested interest in his Employer
Contributions Account or (B) has a vested interest in his Employer
Contributions Account that is greater than zero percent (0%) but less than
one hundred percent (100%) and (ii) pursuant to Section 6.6, received a
distribution from his Employer Account in the form of a lump sum
distribution by the close of the second Plan Year following the Plan Year
in which his employment terminated (or is deemed under this Section and
Section 6.6 to have received such distribution in the case of a nonvested
terminated Member described in subclause (i)(A) above), which distribution
(a) includes the full amount of his entire vested interest in his Employer
Account as a result of his termination of participation in the Plan, and
(b) is $3,500 or less, or is more than $3,500 but is consented to, then
the nonvested, forfeitable amount credited to his Employer Contributions
Account (as of the valuation date with respect to which the amount of the
distribution is determined) shall become a forfeiture as of (x) the
distribution date or (y) the date his employment terminated if no amount
is payable from Employer Contributions made on his behalf, but such Member
is deemed under this Section and Section 6.6 to have received a
distribution of zero dollars on the date his employment terminated.
Provided, however, in the event that a partially vested terminated Member
(described in subclause (i)(B) of the first sentence of this Section
4.6(b)) who received a distribution described in the immediately preceding
sentence resumes employment covered under the Plan, his Employer Account
shall be restored pursuant to Section 4.6(c) if he repays to the Trustee
the full amount of such distribution attributable to Employer
Contributions prior to the earlier of (i) the date on which the Member
incurs a period of five (5) consecutive one year periods of severance, or
(ii) five (5) years after the first date that he is subsequently
re-employed by the Employer. If such Member received an annuity contract
described in Section 6.6, the required repayment shall include the amount
applied from his Employer
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
Account for the purchase of such contract. If a terminated Member with no
amount payable from Employer Contributions made on his behalf, had a zero
percent (0%) vested interest in his Employer Contributions Account at the
time of his termination of employment and, therefore, is deemed under this
Section and Section 6.6 to have received a distribution of a vested
interest in his Employer Contributions Account equal to zero dollars (thus
actually receiving no distribution from his Employer Contributions Account
as a result of his termination of employment), his Employer Contributions
Account will be restored if he resumes employment covered under the Plan
prior to incurring a period of five (5) consecutive one year periods of
severance. Such reemployed Member shall be deemed to have repaid a
distribution of zero dollars on the date of his reemployment with the
Employer.
(c) AMOUNT AND TIMING OF RESTORATION OF ACCOUNTS: With respect to
Employer Accounts that are entitled to be restored as a result of
compliance with all of the requirements of Section 4.6(b), the amount to
be restored under the provisions of this Section 4.6(c) shall be the
amount credited to the Member's Employer Account, both the vested and the
nonvested portions, immediately prior to the rehired Member's distribution
(or deemed distribution), unadjusted by any subsequent gains or losses.
The balance of the Member's Employer Account shall be restored (as soon as
administratively practicable after the later of the date the Member
resumes employment covered under the Plan or the date on which any
required repayment is completed) effective as of the end of the Plan Year
(or other period designated by the Administrative Committee) coincident
with or next following the occurrence of the event which gives rise to the
restoration of the Member's Employer Account.
Except as otherwise provided above, a Member's Employer Account
shall not be restored upon resumption of employment covered under the
Plan. Any portion of the Trust Fund attributable to Active Service prior
to resumption of employment by a Member whose Employer Account has not
been restored shall be held and distributed in accordance with applicable
provisions of the Plan and elections made thereunder. Separate accounts
may be established and maintained for Contributions allocable to such a
Member after his resumption of employment covered under the Plan.
(d) CASH-OUTS OF FULLY VESTED ACCOUNTS WITHIN TWO PLAN YEARS AFTER
THE MEMBER'S TERMINATION OF EMPLOYMENT; NON-REINSTATEMENT OF SUCH
ACCOUNTS: With respect to any Member (i) who terminates employment with
any Employer and all Affiliated Employers, (ii) who has a vested interest
in his Employer Contributions Account equal to 100% and (iii) who received
a distribution from his Employer Account in the form of a lump sum
distribution by the close of the second Plan Year following the Plan Year
in which his employment terminated, which distribution (i) includes the
full amount of his entire vested interest in his Employer Account as a
result of his termination of participation in the Plan, and (ii) is $3,500
or less, or is
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
more than $3,500 but is consented to, shall not be permitted to repay to
the Trustee the full amount of such distribution attributable to Employer
Contributions in order to restore his Employer Account.
(e) DISTRIBUTIONS OTHER THAN LUMP SUM PAYMENTS MADE AFTER THE
MEMBER'S TERMINATION OF EMPLOYMENT: With respect to a Member who (i)
terminates employment with any Employer and all Affiliated Employers with
greater than a zero percent (0%) but less than a one hundred percent
(100%) vested interest in his Employer Contributions Account and (ii)
received payment or began to receive payments of a termination
distribution from his Employer Account in a form other than a lump sum
distribution subject to the provisions of Section 4.6(b), any amount
remaining in his Employer Contributions Account shall continue to be
maintained as a separate account. At any relevant time, such Member's
nonforfeitable portion of his separate account shall be determined in
accordance with the following formula:
X = P (AB + D) - D
For purposes of applying the formula: X is the nonforfeitable portion of
such separate account at the relevant time; P is the Member's vested
interest in his Employer Contributions Account at the relevant time; AB is
the balance of such separate account at the relevant time; and D is the
amount of the distribution. For all other purposes of the Plan, a Member's
separate account shall be treated as an Employer Contributions Account.
The forfeitable portion of a terminated Member's separate Employer
Contributions Account that is subject to such formula shall be forfeited
on the date on which such Member incurs a period of five (5) consecutive
one year periods of severance.
(f) DEFERRED DISTRIBUTIONS OF PARTIALLY VESTED ACCOUNTS: With
respect to a Member who (i) terminates employment with any Employer and
all Affiliated Employers with greater than a zero percent (0%) but less
than a one hundred percent (100%) vested interest in his Employer
Contributions Account and (ii) is not otherwise subject to the forfeiture
provisions of Sections 4.6(b) or (e) above, the forfeitable portion of
such terminated Member's Employer Contributions Account shall be forfeited
on the date on which such Member incurs a period of five (5) consecutive
one year periods of severance.
(g) INVESTMENT OF NONFORFEITABLE PORTION OF EMPLOYER ACCOUNT: If
Members are permitted to direct the investment of their Accounts in
accordance with Section 4.10, a terminated Member shall be entitled to
direct the investment of the nonforfeitable portion of his Account up
until such time as investments are liquidated, if applicable, and
distribution of his interest is made in accordance with Article VI. The
forfeitable portion of such Account shall be invested by the Trustee
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
subject to the provisions of Article IX. Subaccounts may be established to
facilitate these investment provisions.
4.7 EFFECTIVE DATE OF ALLOCATIONS AND ADJUSTMENTS: The Administrative
Committee will credit to each eligible Member's Account the Member's portion of
the Employer Contributions referred to in Section 4.2 so that all Employer
Contributions will become effective and will be credited to each Member's
Account as of the end of the Plan Year (or such shorter accounting period as may
be prescribed by the Administrative Committee) for which they are attributable.
In addition, any amounts contributed to any Member's Employee Rollover
Account or Prior Plan Account shall be credited to the appropriate account as of
the end of the Plan Year (or such shorter accounting period as may be prescribed
by the Administrative Committee) to which they are attributable.
The Administrative Committee shall credit to each Member's Account the
Member's portion of the periodic adjustments and allocations required by Section
4.4 so that all periodic adjustments and allocations will become effective and
will be credited to each Member's Account as of the end of the Plan Year (or
such shorter accounting period as may be prescribed by the Administrative
Committee) for which they are attributable.
In the event that interim adjustments and allocations are required by
Section 4.5, they will become effective and will be entered in each Member's
Account as of the end of the applicable accounting period next preceding the
event requiring the interim adjustment and, additionally, allo cation and
distribution of benefits during the applicable accounting period in which the
interim adjustment or allocation is made shall take into account the interim
adjustment and allocation.
4.8 ACCOUNTING FOR TRANSFERRED MEMBER: In the case of a Member who is
Transferred during a Plan Year, the Administrative Committee, as of the date
that the Member is Transferred, shall transfer on their books such Member's
Account (including that portion of the Trust Fund allo cated thereto) so that
such Member's Account will always be reflected on the Administrative Committee's
books as being attributable to the Employer with whom such Member is currently
employed.
4.9 NO VESTING UNLESS OTHERWISE PRESCRIBED: No allocations, adjustments,
credits or transfers shall ever vest in any Member any right, title or interest
in the Trust Fund except at the times and upon the terms and conditions herein
set forth. Except as otherwise may be provided in Section 4.10, the Trust Fund
shall be, as to all Member's Accounts, a commingled fund.
4.10 MEMBERS' INVESTMENT ELECTIONS:
The following investment procedures shall apply for periods beginning on
and after July 1, 1991:
::ODMA\PCDOCS\HOUSTON\998884\1
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(a) INVESTMENT FUNDS ESTABLISHED: The assets of the Plan may be
invested in one or more investment funds (which conform to any portfolio
standards and guidelines established by the Trustee), including common
stock issued by the Plan Sponsor, as may be determined from time to time
by the Administrative Committee and announced and made available on an
equal basis to all Members. When the Trustee or its agent (i) receives
funds to be invested or determines that assets from those funds, if
applicable, should be sold and the proceeds held for a period of time
pending reinvestment or other purpose, or (ii) has notice that required or
appropriate filings with the Securities and Exchange Commission have not
been timely accepted as filed and funds received have been designated to
be invested in shares of common stock issued by the Plan Sponsor, then,
prior to completion of appropriate filings with the Securities and
Exchange Commission, such funds may be held in cash or invested in
short-term investments, such as U.S. Treasury bills, commercial paper,
demand notes, money market funds, savings accounts, money market accounts,
certificates of deposit or like investments with the commercial department
of any bank, including any bank serving as Trustee (as long as they bear a
reasonable rate of interest and the bank is supervised by the United
States or a state), common, pooled or collective trust funds which any
bank, including any bank serving as Trustee, or any other corporation may
adopt for short-term investments (the governing document of such common,
pooled or collective trust fund(s) being hereby incorporated herein by
reference), and other similar assets which may be offered by the federal
government, or any national or state bank (whether or not serving as
Trustee), which assets shall otherwise remain a part of the fund to which
they relate.
(b) ELECTION PROCEDURES ESTABLISHED: At such times as shall be
prescribed by the Administrative Committee, each Member shall designate
the percentage of his Account as it presently exists and the percentage of
future Contributions to be allocated to his Account to be invested in any
one or more investment funds, as such funds may be established from time
to time as set forth in Section 4.10(a).
At such times and in such manner as prescribed by the Administrative
Committee, Members shall be permitted to change their investment elections
with respect to future Contributions made on their behalf to be invested
in each of the various funds available under the Plan from time to time.
Any such changes shall continue to be effective for all future investments
of Contributions until revoked or revised pursuant to procedures
established by the Administrative Committee. A Member may transfer all or
any percentage of the portion of his existing Account balance which is
subject to his investment direction between and among the various
investment funds available under the Plan upon submission to the
appropriate investment manager (as appointed by the Administrative
Committee pursuant to Section 8.2), or its agent, the necessary
information in a manner accepted by the investment manager or its agent.
Such transfers between and among investment funds shall be processed and
effectuated in accordance with the then-current rules
::ODMA\PCDOCS\HOUSTON\998884\1
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and procedures established by the Trustee, appropriate investment manager
or agent, whichever is applicable. The rules and procedures established by
the Administrative Committee, Trustee and any such investment manager or
agent, and the discretion which they exercise, shall uniformly apply to
Members on a nondiscriminatory basis.
(c) INVESTMENT IN EMPLOYER SECURITIES: Notwithstanding anything to
the contrary herein, no investment shall be made in any securities other
than those permitted under applicable provisions of the Securities Act of
the State of Texas, amended from time to time, so long as the transactions
contemplated by this Plan remain otherwise exempt from the Securities Act
of the State of Texas and the Trustee is not required to register the Plan
as a security under applicable provisions of such Act. In addition, unless
the Plan would not have to be registered under the federal Securities Act
of 1933, no amount in excess of the Employer's Contributions (other than
Salary Reduction Contributions) shall be allocated to the purchase of
securities issued by the Employer or any other company directly or
indirectly con trolling, controlled by or under common control with the
Employer.
(d) ALLOCATIONS ATTRIBUTABLE TO DIRECTED INVESTMENTS IN INVESTMENT
FUNDS: Each valuation and determination of income or loss and appreciation
or depreciation provided for under this Section shall reflect the value of
the different investment funds separately. If investment accounts are
maintained by the Trustee, investment manager or agent of either, for each
Member who has an Account balance under the Plan that is subject to
individual investment direction, then such investment accounts shall be
valued pursuant to the uniform procedures established by the Trustee,
investment manager, or agent of either, which valuations may be made as
often as daily.
With respect to any investment fund maintained on a commingled
basis, as of the last day of a Plan Year (or such other period prescribed
by the Administrative Committee), the Administrative Committee shall
allocate any appreciation, depreciation, income and loss attributable to
such commingled fund among the applicable portion of each Member's Account
that is invested in such fund in the ratio that the amount that was
invested in that particular fund as of the first day of the applicable
accounting period bears to the total amount in all Accounts that was
invested in such fund as of the first day of the accounting period.
(e) ACCOUNTING FOR INVESTMENTS UNDER THIS SECTION: In the event that
a Member does not exercise his right to direct the investment of amounts
credited to all or any portion of his Account that is subject to
individual investment direction, except as may otherwise be required under
the Act, the Trustee shall not assume any responsibility for investment of
such portion of the Member's Account. Subject to the immediately preceding
sentence, the portion of such Member's Account for which no investment
directions are provided by the Member, and any future Contributions
::ODMA\PCDOCS\HOUSTON\998884\1
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allocated to such portion, shall be invested as if the Member had
instructed the Trustee or investment manager, or agent of either, to
invest such portion of his Account in money market obligations or in units
of a fund that invests in money market obligations, including without
limitation securities issued or guaranteed by the Government of the United
States of America or any agency or instrumentality thereof (whether or not
subject to repurchase agreements), time deposits and certificates of
deposit, savings bank deposits, bankers' acceptances and commercial paper,
as well as in other corporate obligations or participations therein, and
nonparticipating, nonconvertible preferred stocks providing for cumulative
dividends (excluding securities or other property of the Employer or of
its subsidiaries or affiliates), as such terms are defined under Rule 405
promulgated under the Securities Act of 1933, as amended.
With respect to the period in which any Member exercises (or is
deemed to exercise) the right to direct the Trustee or investment manager,
or agent of either, with respect to the investment of any amounts credited
to his Account, for purposes of maintaining separate accounting for assets
subject to the investment direction of the Member, individual investment
account(s) shall be established by the Administrative Committee or its
agent for the Member. In such event, any (i) income, gain or loss
realized, (ii) appreciation or depreciation in value, and (iii) costs,
expenses, withdrawals, distributions or other payments attributable to
amounts credited to the Member's investment account from and after the
previous Valuation Date, shall be allocated and credited or charged, as
applicable, to such investment account. The Member's investment account
shall be held, invested and reinvested as directed (or deemed to be
directed) by the Member solely and exclusively for such Member and not as
part of any commingled fund within the Trust fund and, thus, amounts
allocable to the investment account shall not be taken into account when
determining income, gains and losses of any portion of the Trust Fund
which is not allocable to the Member's investment account. Costs and
expenses attributable to a Member's investment account means such costs
and expenses described in subsection (f) below.
(f) ACCOUNTING FOR COSTS, FEES, EXPENSES, ETC.: Notwithstanding any
other provision of the Plan to the contrary, and unless otherwise
determined and directed by the Administrative Committee, incident to
determining the costs and expenses of the Trust, all taxes, brokerage
commissions, charges, fees and other costs and expenses incurred in
connection with the purchase or sale of assets for the investment account
of a Member who directs (or its deemed to direct) the Trustee or
investment manager, or agent of either, with respect to investment of his
Account, and all costs, charges, fees or expenses incurred incident to any
distribution of such investment account, shall be charged directly to such
account.
::ODMA\PCDOCS\HOUSTON\998884\1
IV-19
<PAGE>
(g) VALUATION DATES: Pursuant to nondiscriminatory rules established
by the Administrative Committee and uniformly applied to similarly
situated Members, separate Valuation Dates may be established (with
respect to one Member's Account that may not apply to another Member's
Account) as necessary or appropriate to facilitate measurement of
investment performance, changes in investments or distribution of the
Accounts of Members who direct (or are deemed to direct) their investments
pursuant to this Section.
The Administrative Committee shall be responsible for record keeping
and other accounting with respect to Members' Accounts. The Administrative
Committee shall provide each Member with a statement showing the value of
his entire Account balance as of the end of a Plan Year (or such shorter
period prescribed by the Administrative Committee). The Administrative
Committee may, in its discretion, engage and rely on accountants,
consultants and such other agents and advisors as it deems to be
appropriate to fulfill its recordkeeping duties hereunder.
(h) SECTION 404(C) OF THE ACT: Except as may otherwise be prescribed
by the Administrative Committee, investment funds, categories of assets,
election procedures and other rules relating to investment elections under
this Section shall comply with the requirements of Section 404(c) of the
Act.
(i) TRANSITION RULE FOR INVESTMENT ELECTIONS: With respect to
periods beginning prior to July 1, 1991, the applicable terms and
provisions of the Plan document, as then in effect, concerning investment
procedures and elections shall apply on a consistent and nondiscriminatory
basis.
4.11 SPECIAL TRANSITION RULE: Notwithstanding any other provision of the
Plan to the contrary, if the Plan is retroactively effective with respect to any
Plan Year (or other applicable accounting period) of a Prior Plan, the Account
of any individual who was a participant or Member during such Plan Year (or
other applicable accounting period) shall be credited with any Employer
Contributions and forfeitures, if applicable, under the Plan attributable to
such accounting period, if such Member's Account would have been entitled to
such an allocation under the Prior Plan immediately prior to the later of (i)
the adoption of or (ii) the effective date of the amendment, restatement and
continuation of the Prior Plan under the form of the Plan. In addition,
notwithstanding any other provision of the Plan to the contrary, if the
participant or Member des cribed in the preceding sentence would have been so
entitled under the Prior Plan immediately prior to the later of (i) the adoption
of or (ii) the effective date of, its amendment, restatement and con tinuation
under the form of the Plan, the Account of such Member shall be charged or
credited, in accordance with the terms of the Prior Plan, with its proportionate
share of the Trust Fund's income, loss, appreciation or depreciation
attributable to such accounting period.
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
ARTICLE V
RETIREMENT
5.1 NORMAL RETIREMENT: A Member may retire on the last day of the month
ending coincident with or immediately following his normal retirement age. A
Member's normal retirement age shall be his sixty-fifth (65th) birthday, from
which time he shall henceforth be one hundred percent (100%) vested in his
Account.
5.2 LATE RETIREMENT: A Member may continue his employment after he attains
normal retirement age; provided, however, that he shall have the right to retire
on any subsequent date.
5.3 RIGHTS OF MEMBERS AND PROHIBITION OF UNAUTHORIZED DISTRIBUTION: Until
a Member retires or otherwise terminates service he shall be accorded all rights
as a Member under the Plan, but, subject to Section 6.6, he shall receive no
distribution until he actually retires or otherwise becomes entitled to a
distribution under the provisions of Article VI.
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
ARTICLE VI
DISTRIBUTION OF BENEFITS
Distributions under the Trust shall be made to Members, spouses,
Beneficiaries, executors or administrators, as the case may be, only upon the
following conditions and in the manner
specified.
6.1 DEATH BENEFIT: On the death of a Member prior to complete distribution
of such Member's Account, his death benefit shall be (i) 100% of the amount
credited to his Account as of the end of the applicable accounting period (for
which the last valuation was made) coincident with or next preceding the date of
the Member's death, (ii) an amount equal to any Rollover Contributions and
direct transfers allocable to his Account after the end of such accounting
period, (iii) an amount equal to any Employer Contributions made on behalf of
such Member after the end of such accounting period, and (iv) to the extent that
the Member's Account has any undistributed balance which has not been paid as of
the end of the applicable accounting period (for which the last valuation was
made), that portion of the periodic adjustments and allocations required by
Article IV to be credited to the Member's Account as of the end of the
applicable accounting period next preceding or coincident with payment of the
benefits described above. In accordance with Section 6.10, the benefits
described in this Section shall be reduced by any security interest held by the
Plan by reason of any outstanding loan to the Member.
The death benefit shall be paid to the Member's surviving spouse, or if
there is no surviving spouse or the surviving spouse consents in the manner
described below, to such Member's designated Beneficiary (other than such
surviving spouse). At any time, subject to the following provisions of this
Section, each Member shall have the right to designate any Beneficiary or Bene
ficiaries to receive his death benefit and shall have the unrestricted right to
revoke any such designation; provided, however, subject to the subsequent
provisions hereof which permit the spouse to consent to the Member's waiver of
the requirements of this sentence, any new designation of a Beneficiary (other
than the Member's spouse) by a Member who is lawfully married (or deemed to be
married under applicable local law) shall require a new spousal consent. Each
such designation or revocation by a Member shall be evidenced by a written
instrument which shall be (i) limited to a benefit for at least one specific
Beneficiary (including a nonspouse Beneficiary, or any class of Beneficiaries or
any contingent Beneficiaries), (ii) filed with the Administrative Committee,
(iii) signed by the Member, and (iv) bear the signature of at least one person
who shall be a representative designated by the Administrative Committee or a
Notary Public as witnesses to his signature.
With respect to any Member who is lawfully married (or deemed to be
married under applicable state law), any such Member's designation of a
Beneficiary (other than the Member's spouse) to receive any portion of such
death benefit shall be deemed to be ineffective, unless the Member's spouse
consents to such designation and acknowledges the effect of such election, which
consent and acknowledgement shall be evidenced by a written instrument which
shall be (i) limited
::ODMA\PCDOCS\HOUSTON\998884\1
VI-1
<PAGE>
to a benefit for at least one specific Beneficiary which may not be changed
without spousal consent (or the spouse's consent expressly permits at least one
additional designation of another Beneficiary without any requirement of further
consent by such spouse if such spouse's consent expressly acknowledges that a
more limited consent could be provided), (ii) filed with the Administrative
Committee, (iii) signed by the spouse and (iv) bear the signature of at least
one person who shall be a representative designated by the Administrative
Committee or a Notary Public as witnesses to the signature. Notwithstanding the
immediately preceding sentence, a Member's designation of a Beneficiary (other
than the Member's spouse) shall be effective if it is established to the
satisfaction of the Administrative Committee that the consent required in the
preceding sentence may not be obtained because (i) there is no spouse, (ii) the
spouse cannot be located, (iii) the Member has provided a duly certified copy of
a court order issued by a court of competent jurisdiction which recognizes that
the Member is legally separated or has been abandoned (under applicable local
law) and the Administrative Committee has not received a duly certified copy of
a qualified domestic relations order (described in Section 414(p) of the Code)
which requires spousal consent, or (iv) there exists such other circumstance (as
are prescribed under Sections 401(a)(11) and 417(a)(2) of the Code) which
obviate the necessity of obtaining the consent described in the preceding
sentence. In addition, if the surviving spouse is not legally competent to give
consent, such spouse's legal guardian, who may be the Member, may give the
required consent. Any consent by a Member's spouse (or establishment that the
consent of a Member's spouse may not be obtained) shall be effective only with
respect to such spouse.
Notwithstanding any other provision hereof to the contrary, commencing
with Plan Years beginning after October 22, 1986, any spousal consent which
expressly acknowledges that a more limited consent could be provided may
expressly provide that the spouse consents to the designation by the Member of
any Beneficiary (or any number of specified Beneficiaries) without any
requirement of further consent by the spouse and, in such event, no further
spousal consent shall be required, provided that any change of Beneficiary by
the Member does not exceed any limit contained in the spouse's consent on such
Member's right to change his Beneficiary . Any spousal consent shall be deemed
to be revocable unless it is expressly made irrevocable at the election of the
Member's spouse.
Any designation of a Beneficiary (other than the Member's spouse) which
otherwise meets the above requirements of this Section shall become inoperative
in the event that (i) the Member subsequently marries (or subsequently is deemed
to be married under applicable state law), (ii) any missing spouse is located or
(iii) any other circumstance which earlier precluded the necessity of obtaining
consent of the Member's spouse no longer exists. If no designation of
Beneficiary is on file with the Administrative Committee at the time of the
Member's death, or if the Administrative Committee for any reason determines
that such designation is ineffective, then such Member's spouse, if then living,
or if not, then the executor, administrator, or other personal representative of
the estate of such Member shall be conclusively deemed to be the Beneficiary
designated to receive such Member's death benefit.
::ODMA\PCDOCS\HOUSTON\998884\1
VI-2
<PAGE>
The provisions of this Section are intended to comply with the
requirements of Sections 401(a)(11) and 417(a)(2) of the Code. To the extent any
provision hereof is inconsistent with the preceding sentence, such provision
shall be deemed to be inoperative and the Plan shall be operated in a manner
which complies with the requirements of the immediately preceding sentence.
Whenever the Trustee is authorized by this Plan or by a designation of
Beneficiary to pay funds to a minor or an incompetent, the Trustee shall be
authorized to pay such funds to a parent of such minor, to a guardian of such
minor or incompetent, or directly to such minor, or to apply such funds for the
benefit of such minor or incompetent in such manner as the Administrative
Committee may in writing direct. The Trustee, Administrative Committee, and
Employer shall be fully discharged with respect to any payment made in
accordance with the preceding sentence.
6.2 RETIREMENT BENEFIT: Upon the retirement of a Member, his retirement
benefit shall be (i) 100% of the amount credited to his Account as of the end of
the applicable accounting period (for which the last valuation was made)
coincident with or next preceding his retirement, (ii) an amount equal to any
Rollover Contributions and direct transfers allocable to his Account after the
end of such period, (iii) an amount equal to any Employer Contributions made on
behalf of such Member after the end of such accounting period, and (iv) to the
extent that the Member's Account has any undistributed balance which has not
been paid as of the end of the applicable accounting period (for which the last
valuation was made), that portion of the periodic adjustments and allocations
required by Article IV to be credited to the Member's Account as of the end of
the applicable accounting period next preceding or coincident with payment of
benefits described above. In accordance with Section 6.10, the benefits
described in this Section shall be reduced by any security interest held by the
Plan by reason of any outstanding loan to the Member.
6.3 TOTAL AND PERMANENT DISABILITY BENEFIT: In the event that the
Administrative Committee determines that a Member is suffering from a Total and
Permanent Disability, his disability benefit shall be (i) 100% of the amount
credited to his Account as of the end of the applicable accounting period (for
which the last valuation was made) coincident with or next preced ing such
determination, (ii) an amount equal to any Rollover Contributions and direct
transfers allocable to his Account after the end of such period, (iii) an amount
equal to any Employer Contributions made on behalf of such Member after the end
of such accounting period, and (iv) to the extent that the Member's Account has
any undistributed balance which has not been paid as of the end of the
applicable accounting period (for which the last valuation was made), that
portion of the periodic adjustments and allocations required by Article IV to be
credited to the Member's Account as of the end of the applicable accounting
period next preceding or coincident with payment of benefits described above.
The Administrative Committee's determination as to whether there is a Total and
Permanent Disability and the date on which such disability occurred shall be
based upon the opinion of a physician selected or pre-approved by the
Administrative Committee, and shall be final and conclusive with respect to all
persons and entities. In accordance with Section 6.10, the benefits described in
this Section shall be reduced by any security interest held by the Plan by
reason of any outstanding loan to the Member.
::ODMA\PCDOCS\HOUSTON\998884\1
VI-3
<PAGE>
6.4 SEVERANCE BENEFIT: Upon a Member's severance from employment with the
Employer and all Affiliated Employers, for any reason other than death, normal
retirement, or Total and Permanent Disability, his severance benefit shall be an
amount equal to the sum of: (i) 100% of the total amount credited to his
Employer Nonforfeitable Contributions Account, Employee Rollover Account and
Employee Prior Plan Account, as of the end of the applicable accounting period
(for which the last valuation was made) coincident with or next preceding the
date of such Member's severance, together with any Employer Contributions,
Rollover Contributions or direct transfers made by or on behalf of the Member
after the end of such accounting period which were allocated to any of the
above-listed accounts, (ii) the percentage of (a) the total amount credited to
his Employer Contributions Account as of the end of such accounting period
coincident with or next preceding the date of such Member's severance, together
with (b) the amount of any Employer Contributions made on behalf of such Member
after the end of such accounting period which were allocated to his Employer
Contributions Account, as such percentage is shown in the table set out below
for the number of years of Active Service credited to the Member prior to his
date of severance of employment, and, if applicable, (iii) to the extent that
the Member's Account has any undistributed balance which has not been paid as of
the end of the applicable accounting period (for which the last valuation was
made), that portion of the periodic adjustments and allocations required by
Article IV to be credited to the Member's Account as of the end of the
applicable accounting period next preceding or coincident with payment of the
benefits described above. In accordance with Section 6.10, the benefits
described in this Section shall be reduced by any security interest held by the
Plan by reason of any outstanding loan to the Member.
Less than one year................................ 0%
One year, but less than two years................. 20%
Two years, but less than three years ............. 40%
Three years, but less than four years............. 60%
Four years, but less than five years.............. 80%
Five years or more................................100%
A former Member shall be entitled to benefits under the vesting schedule,
if any, and other terms and provisions of the Prior Plan as in effect on the
date that the former Member's employment with the Employer was terminated. The
above vesting schedule is subject to, as applicable, automatic 100% vesting in
the event of a full or partial termination of the Plan pursuant to Section 11.5.
The amount credited to such Member's Account which is not then vested shall be
forfeited and applied as provided in Section 4.6.
6.5 ACCOUNTING FOR DISTRIBUTIONS; OFFSETS IN SPECIAL CIRCUMSTANCES:
Subject to Section 4.6 governing restoration of Members' Accounts and to Section
4.10 concerning individual investment direction, if applicable, any distribution
of benefits under the Plan (and any forfeitures arising incident thereto) shall
be subtracted from the affected Member's Account balance as of the end of the
Plan Year (or such shorter accounting period as may be prescribed by the
Administrative Committee) coincident with or next preceding the applicable
accounting period in which such distribution was paid. Moreover, notwithstanding
any other provision of the Plan to the contrary, if after a former Member's
employment with the Employer and all other Affiliated Employers ter-
VI-4
<PAGE>
minates, such person is (i) reemployed by the Employer after receiving a
distribution pursuant to Section 6.6 and again becomes eligible for membership,
and (ii) has his Employer derived Account restored pursuant to Section 4.6, then
any benefits that such Member may become entitled to receive after reentry in
the Plan shall be reduced by any amounts distributed from his Employer Account
which were not repaid by such Member incident to restoration of his Employer
Account pursuant to Section 4.6.
6.6 DISTRIBUTIONS-SETTLEMENT OPTIONS:
(a) GENERAL RULES:
(i) FORM AND METHOD OF PAYMENT OF BENEFITS: Except in the
event of a special circumstance described in Sections 3.1, 3.3, 6.8,
6.11, 10.4, 10.7 or 11.3, distributions shall be made under the Plan
only upon the occurrence of one of the events described in Sections
6.1 through 6.4. To the extent required by Section 401(k) of the
Code, the limits of this sentence shall continue to apply even if
Trust Fund assets attributable to any Member's Account are
transferred to another plan pursuant to applicable provisions of
Section 8.2, or 10.7. Subject to the following provisions of this
Section 6.6(a) and Sections 6.6(b), 6.6(c) and 6.6(d), distributions
provided for under the Plan shall be made in the form of a lump sum
payment in cash. With respect to any amounts invested in shares of
the common stock of United Financial Group, Inc., distribution shall
be made on a consistent and nondiscriminatory basis in accordance
with the applicable provisions of the Plan document as in effect
prior to the Effective Date.
A Member must consent, in writing, to any required
distribution if the present value of the Member's vested Account
balance (derived from Employer and any Employee Contributions)
distributable under the Plan exceeds $3,500 and the Member has not
attained the normal retirement age described in Article V.
Notwithstanding any other provision of the Plan to the contrary, any
Member who does not have a greater than zero percent (0%) vested
interest in his Employer Contributions Account as of the date his
employment by the Employer and all Affiliated Employers terminates,
but who otherwise would have been eligible to receive a distribution
had any portion of his Employer Contributions Account been more than
zero percent (0%) vested, shall be deemed to have received a
distribution of the vested balance of his Employer Contributions
Account equal to zero dollars. After the Member's death, benefits
may be paid in accordance with applicable provisions of the Plan
without regard to the requirements of the preceding provisions of
this paragraph.
(ii) DISTRIBUTABLE ACCOUNT BALANCE DOES NOT EXCEED $3,500.
If the present value of a Member's vested Account balance (derived
from Employer Contributions and any Employee Contributions) that is
distributable under the Plan does not exceed $3,500, the Member's
vested Account balance shall be distributed
::ODMA\PCDOCS\HOUSTON\998884\1
VI-5
<PAGE>
in a lump sum payment. Such distribution may be made without the
necessity of obtaining the consent of the Member and/or his spouse
or any other Beneficiary. Such payment may be made as soon as
practicable, but (absent circumstances beyond the control of the
Administrative Committee) in no event later than sixty (60) days
after the last day of the Plan Year in which the Member's employment
with the Employer and all Affiliated Employers is terminated.
(iii) DISTRIBUTABLE ACCOUNT BALANCE EXCEEDS $3,500. If the
present value of a Member's vested Account balance (derived from
Employer Contributions and any Employee Contributions) that is
distributable under the Plan is in excess of $3,500 and if the
Member provides the Administrative Committee with written consent to
the distribution, the Administrative Committee shall direct the
Trustee to make settlement of the Member's Account within the 60-day
period (or as soon as practicable) after the Administrative
Committee receives such consent, but (absent circumstances beyond
the control of the Administrative Committee) in no event later than
sixty (60) days after the last day of the Plan Year in which the
Member's employment with the Employer and all Affiliated Employers
was terminated. No such written consent shall be considered valid
unless (within the period which shall begin no more than ninety (90)
days before the annuity starting date (described below) and end no
less than thirty (30) days before the annuity starting date) such
Member has received a general written explanation of the general
features and values of each optional form of payment available under
the Plan, and has been informed in writing of his right to defer
receipt of the distribution. Such written explanation may be
provided by mail, personal delivery, or other means which would
normally ensure or facilitate the continued attention of the Member
during the period prescribed below in which the Member is to consent
to the distribution or otherwise be deemed to have elected to defer
receipt (as set out below). Written consent of the Member shall be
invalid unless it is given after receipt of the written explanation
described above and not more than ninety (90) days before the
annuity starting date. The term "annuity starting date" means the
first day of the first period for which an amount is paid pursuant
to the settlement option elected under the Plan.
In addition, subject to a designated Beneficiary's right to
elect the date of settlement in the case of a Member who dies prior
to receipt of any benefits under the Plan, a valid written consent
to distribution may be made by a Member without the necessity of
obtaining the consent of the Member's spouse or any other
Beneficiary. If the present value of such Member's vested Account
balance which is distributable under the Plan is in excess of $3,500
at the time of distribution, the present value of such Account
balance at any subsequent time shall be deemed to exceed $3,500.
If the Administrative Committee fails to receive the Member's
written consent to the distribution within 60 days after his receipt
of the written explanation described above, absent circumstances
beyond the control of the Administrative Committee, the settlement
shall be made within 60 days after the last day of the Plan
::ODMA\PCDOCS\HOUSTON\998884\1
VI-6
<PAGE>
Year in which occurs the earlier of the date the Member dies or
attains the normal retirement age. Subject to application of the
forfeiture provisions of Section 4.6, the Account balance of any
Member described in the immediately preceding sentence shall
continue to be part of the Trust Fund and thus shall continue to be
allocated its proportionate share of any income, loss, appreciation
or depreciation pending distribution of such Account balance;
provided, however, no further Contributions shall be credited to his
Account.
If a distribution is one to which Section 401(a)(11) and
Section 417 of the Code do not apply, such distribution may commence
less than 30 days after the notice required under Section
1.411(a)-11(c) of the Income Tax Regulations is given, provided
that:
(1) the Administrative Committee clearly informs the Member
that the Member has a right to a period of at least 30
days after receiving the notice to consider the decision
of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and
(2) the Member, after receiving the notice, affirmatively
elects a distribution.
If Members are permitted to direct the investment of their
Accounts in accordance with Section 4.10, a former Member shall be
entitled to direct the investment of his Account after the Member
becomes entitled to a distribution under Article VI of the Plan.
(iv) DISTRIBUTION REQUIREMENTS: Capitalized terms used in this
Section 6.6(a)(iv) which are not otherwise defined in Article I are
defined in Section 6.6(a)(iv)(3). Subject to Section 6.6(b)
concerning qualified joint and survivor annuity and qualified
preretirement survivor annuity requirements, the requirements of
this Section 6.6(a)(iv) shall apply to any distribution of a
Member's or Beneficiary's vested Benefit and will take precedence
over any inconsistent provisions of the Plan. All distributions
required under Article VI shall be deter mined and made in
accordance with Section 401(a)(9) of the Code, including the minimum
distribution incidental benefit requirement of Section 1.401(a)(9)-2
of the proposed Income Tax Regulations or any successor or final
regulation issued with respect thereto. Unless otherwise specified,
the provisions of this Section 6.6(a)(iv) apply to calendar years
beginning after December 31, 1984.
(1) REQUIRED BEGINNING DATE. In accordance with Section
401(a)(14) of the Code, notwithstanding any other provision of
the Plan to the contrary but subject to the next sentence, the
Trustee must make full settlement or begin Benefit payments to
the Member not later than the 60th day after the latest of the
close of the Plan Year in which: (a) the Member
::ODMA\PCDOCS\HOUSTON\998884\1
VI-7
<PAGE>
attains the normal retirement age set out in Article V, (b)
occurs the tenth (10th) anniversary of the year in which the
Member commenced participation in the Plan, or (c) the Member
terminates employment with the Employer. The entire vested
Benefit payable to a Member must be distributed no later than
the Required Beginning Date as defined below.
(2) MEMBER'S DEATH PRIOR TO RECEIPT OF ALL VESTED
BENEFITS - 5- YEAR RULE. In the event that the Member dies
prior to payment of Benefits hereunder, such Member's entire
vested Benefit shall be distributed following the Member's
date of death on, or as soon as is administratively
practicable following, the date elected by the Member's
Designated Beneficiary (but in any event not later than
December 31 of the calendar year in which occurs the fifth
(5th) anniversary of the date of the Member's death) in the
form of a lump sum payment. Any such election must be made
(and shall be deemed irrevocable) as of December 31 of the
calendar year in which occurs the fifth (5th) anniversary of
the Member's date of death. Provided, however, if the present
value of the Member's vested Account balance (derived from
Employer Contributions and any Employee Contributions) that is
distributable on account of the death of the Member does not
exceed $3,500, such Member's entire vested Account balance
shall be distributed in a lump sum payment, which payment
shall be made as soon as practicable, but (absent
circumstances beyond the control of the Administrative
Committee) in no event later than sixty (60) days after the
last day of the Plan Year in which the Member's date of death
occurs.
(3) DEFINITIONS.
(A) DESIGNATED BENEFICIARY. The individual who is
desig nated as the Beneficiary under the Plan in
accordance with section 401(a)(9) of the Code.
(B) BENEFIT.
(i) The Account Balance as of the last
valuation date in the calendar year immediately
preceding the Distribution Calendar Year
(valuation calendar year) increased by the amount
of any contributions allocated to the Account as
of dates in the valuation calendar year after the
valuation date, and decreased by distributions
made in the valuation calendar year after the
valuation date.
(ii) For purposes of Section
6.6(a)(iv)(3)(C)(i) above, if any portion of the
minimum distribution for the first Distribution
Calendar Year is made in the second Distribution
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
Calendar Year on or before the Required Beginning
Date, the amount of the minimum distribution made
in the second Distribution Calendar Year shall be
treated as if it had been made in the immediately
preceding Distribution Calendar Year.
(C) DISTRIBUTION CALENDAR YEAR. A calendar year
for which a minimum distribution is required.
(D) REQUIRED BEGINNING DATE.
(i) GENERAL RULE. The Required Beginning
Date of a Member is the first day of April of the
calendar year following the calendar year in which
the Member attains age 70-1/2.
(ii) TRANSITIONAL RULES. The Required
Beginning Date of a Member who attains age 70-1/2
before January 1, 1988, shall be determined in
accordance with (1) or (2) below:
(1) NON-5-PERCENT OWNERS. The Required
Beginning Date of a Member who is not a
5-percent Owner (defined below) is the first
day of April of the calendar year following
the calendar year in which the later of
retirement or attainment of age 70-1/2
occurs.
The Required Beginning Date of a
Member who is not a 5-percent Owner who
attains age 70-1/2 during 1988 and who has
not retired as of January 1, 1989, is
January 1, 1990.
(2) 5-PERCENT OWNERS. The Required
Beginning Date of a Member who is a
5-percent Owner during any year beginning
after December 31, 1979, is the first day of
April following the later of :
(A) the calendar year in which
the Member attains age 70-1/2, or
(B) the earlier of the calendar
year with or within which ends the
Plan Year in which the Member becomes
a 5-percent Owner, or the calendar
year in which the Member retires.
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
(iii) 5-PERCENT OWNER. A Member is treated
as a 5- percent Owner for purposes of this Section
if such Member is a 5-percent Owner as defined in
Section 416(i) of the Code (determined in
accordance with Section 416 but without regard to
whether the Plan is Top-Heavy) at any time during
the Plan Year ending with or within the calendar
year in which such owner attains age 66-1/2 or any
subsequent Plan Year.
(iv) DISTRIBUTIONS BEGUN TO 5-PERCENT OWNER.
Once distributions have begun to a 5-percent Owner
under this Section, they must continue to be
distributed, even if the Member ceases to be a
5-percent Owner in a subsequent year.
(b) QUALIFIED JOINT AND SURVIVOR ANNUITY AND QUALIFIED PRERETIREMENT
SURVIVOR ANNUITY RULES: Notwithstanding any other provisions of the Plan
to the contrary, the following requirements that govern the qualified
joint and survivor annuity ("QJSA") and qualified preretirement survivor
annuity ("QPSA") shall supersede and override any con flicting provision
of the Plan with respect to any portion of a Member's Account attributable
to a transfer from a Prior Plan which was subject to such requirements.
The QJSA and QPSA shall be the normal form of benefit for a Member who
meets the requirements set forth in (i) below, unless the QJSA or QPSA is
validly waived with spousal consent as described in (ii) and (iii) below.
In the event of a valid waiver, a Member or his designated Beneficiary, as
applicable, may elect an alternative form of payment pursuant to Section
6.6(a).
(i) APPLICATION, DEFINITIONS, TERMS AND PROVISIONS.
Notwithstanding any other provision of Section 6.6(a) to the
contrary, with respect to any Member:
(1) whose Account is used to offset benefits in any plan
described in clause (A) or clause (B), or is derived in part
from (A) a direct or indirect transfer after December 31, 1984
from any defined contribution plan (described in Sections
401(a) and 414(i) of the Code which is subject to the funding
standards of Section 412 of the Code) or any defined benefit
plan (described in Sections 401(a) and 414(j) of the Code), or
(B) a direct or indirect transfer from any other defined
contribution plan (described in Sections 401(a) and 414(i) of
the Code) to which clause (A) applied to such Member as a
participant in such plan, or which was required to provide
automatic survivor benefits,
(2) who has been continuously married to the same spouse
throughout the one-year period ending on the earlier of (A)
the Annuity Starting Date (described below) or (B) the date of
the Member's death (provided, however, that if the Member is
married for less than a one-year period ending on the Annuity
Starting Date and the Member and his spouse
::ODMA\PCDOCS\HOUSTON\998884\1
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in such marriage remain continuously married for at least a
one-year period, such Member and his spouse shall be treated
for purposes of this Section 6.6(b) as having been married
throughout the one-year period ending on the Annuity Starting
Date, and, therefore, the Plan shall treat any Member and
spouse who are married on the Annuity Starting Date as married
and, accordingly, must provide benefits which are to commence
on the Annuity Starting Date in the form of a QJSA, unless the
Member (with spousal consent) elects another form of benefit;
provided, however that if the Member and the spouse do not
remain married for at least a one-year period, the Plan shall
treat the Member as not having been married on the Annuity
Starting Date and, therefore, the spouse shall lose any right
to a survivor benefit and no retroactive correction of the
amount paid to the Member shall be required),
(3) who has completed at least one hour of service or at
least one hour of paid leave after August 23, 1984, and
(4) who has any vested and nonforfeitable right to any
portion of his Account balance derived from Employer
Contributions, any benefit which is wholly or partially
attributable to any direct or indirect transfer described in
Section 6.6(b)(i)(1) above and such Account balance derived
from Employer Contributions which is payable under the Plan to
a Member who is living on the Annuity Starting Date (described
below) on account of such Member's retirement for age or
disability or other termination of employment (for any reason
other than the Member's death) on or after the first day of
the Plan Year beginning after December 31, 1984,
shall be paid in the form of a QJSA (described below), unless the
Member and his spouse otherwise elect as described below.
In the event that such Member dies on or after August 23,
1984, and before the Annuity Starting Date, a QPSA (described below)
shall be provided to the Member's surviving spouse, unless the
Member and his surviving spouse otherwise elect as described below.
In addition, with respect to a Member who would be entitled to a
QJSA if such Member were married, unless an optional form of benefit
is selected within the 90-day period ending on the Annuity Starting
Date, such unmarried Member's vested Account balance will be paid in
the form of an immediate nontransferable life annuity which shall be
purchased from any life insurance company licensed to conduct
business in the State of the situs of the Trust. In the event of any
conflict between applicable provisions of the Plan and the terms of
such commercial annuity, the terms of the Plan shall control.
The term "qualified joint and survivor annuity" ("QJSA") means
an immediate annuity which can be provided by the value of the
Member's vested
::ODMA\PCDOCS\HOUSTON\998884\1
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interest in the balance credited to his Account (reduced by any
security interest held by the Plan by reason of an outstanding loan
to such Member) and that is payable for the life of the Member with
a survivor annuity for the life of the Member's spouse which is
fifty percent (50%), seventy-five percent (75%) or one hundred
percent (100%) of the amount of the annuity which is payable during
the joint lives of the Member and his spouse. The survivor
percentage may be elected in writing by the Member, or fifty percent
(50%) in the event no such election is made.
The term "qualified preretirement survivor annuity" ("QPSA")
means an immediate annuity for the life of the surviving spouse
which can be provided by the value of the Member's vested interest
in the balance credited to his Account (reduced by any security
interest held by the Plan by reason of an outstanding loan to such
Member).
The term "Annuity Starting Date" means the first day of the
first period for which an amount is paid as an annuity or any other
form.
Periodic payments under the QJSA or the QPSA shall be provided
by the purchase of a commercial annuity from any life insurance
company licensed to conduct business in the State of the situs of
the Trust, provided that either such annuity shall be issued or
endorsed as nontransferable so that the owner thereof cannot sell,
assign, discount, or pledge as collateral for a loan or as security
for the performance of an obligation or for any other purpose his
interest in such contract to any person other than the issuer of
such annuity upon the surrender thereof. In the event of any
conflict between the Plan and any such commercial annuity purchased
hereunder, the terms of the Plan shall control. The Member's
surviving spouse may elect to have any QPSA payable hereunder
distributed as soon as administratively practicable.
(ii) ELECTION PERIODS. Each applicable Member (with the
consent of his spouse) may elect (at any time during the ninety (90)
day period ending on the Annuity Starting Date) to waive the QJSA
form of benefit and such Member (without the consent of his spouse)
may revoke any such election at any time during such election
period. Except as otherwise provided below, the Member's waiver of
the QJSA must (i) provide for at least one specific Beneficiary
(including the specific nonspouse Beneficiary, a class of
Beneficiaries, or any contingent Beneficiaries) who will receive the
Plan benefit and (ii) specify the particular optional form of
benefit payment. In addition, or in the alternative, each Member
(with the consent of his spouse) generally may elect (at any time
during the period which begins on the first day of the Plan Year in
which the Member attains age thirty-five (35) and ends on the date
of the Member's death) to waive the QPSA form of benefit, and such
Member (without the consent of his spouse) may revoke any such
election at any time during such period. Provided, however, each
Member who otherwise would not be eligible to elect the waiver
described in the immediately preceding sentence may nevertheless
::ODMA\PCDOCS\HOUSTON\998884\1
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elect to waive the QPSA form of benefit prior to the first day of
the Plan Year in which the Member attains age thirty-five (35)
provided that (i) a written explanation of the QPSA was given to the
Member and (ii) such waiver shall become invalid upon the first day
of the Plan Year in which the Member's thirty-fifth (35th) birthday
occurs. If the Member (with the consent of his spouse) does not
execute a new waiver after such date, the Member's surviving spouse
shall receive the QPSA form of benefit upon the Member's death prior
to the Annuity Starting Date. Except as otherwise provided below,
the Member's waiver of the QPSA must provide for at least one
specific Beneficiary (including the specific nonspouse Beneficiary,
a class of Beneficiaries, or any contingent Beneficiaries) who will
receive the Plan benefit, but is not required to specify the
optional form of payment of any preretirement spousal death benefit.
Although the number of revocations shall not be limited,
subject to the following sentence, any new waiver hereunder will
require a new spousal consent, except that a married Member may
change any optional form of preretirement spousal death benefit
payment available under the Plan without obtaining spousal consent.
Commencing with Plan Years beginning after October 22, 1986, any
spousal consent that expressly acknowledges that a more limited
consent could be provided may expressly permit designation by the
Member of any Beneficiary (or any number of specified
Beneficiaries), and any optional form of benefit payment available
under the Plan where the spousal consent pertains to the Member's
waiver of the QJSA, without any requirement of further consent by
such spouse, and, in such event, no further spousal consent shall be
required hereunder provided that any change of Beneficiary or
optional form of benefit does not exceed any limit (contained in
such spousal consent) on the Member's right to change any
Beneficiary or optional form of benefit.
(iii) SPOUSAL CONSENT. Except as otherwise provided under
applicable pro visions of this Section, no election by any Member
under the preceding paragraph shall be effective unless the Member's
spouse consents in writing to such election and acknowledges the
effect of such election. The spouse's consent and acknowledgment
shall (1) be limited to a benefit for at least one specific
Beneficiary (or any optional form of benefit payment available under
the Plan where the spousal consent pertains to the Member's waiver
of the QJSA) which cannot be changed without spousal consent, (2) be
filed with the Administrative Committee, (3) be signed by the spouse
and (4) shall bear the signature of at least one person (who shall
be an appointed representative of the Administrative Committee or a
Notary Public) as witness to the spouse's signature. Commencing with
Plan Years beginning after October 22, 1986, any such spousal
consent (which expressly acknowledges that a more limited consent
could be provided) may expressly provide that the spouse consents to
designation by the Member of any Beneficiary (or any number of
specified Beneficiaries) and any optional form of benefit payment
available under the Plan where the spousal consent pertains to the
Member's waiver of the QJSA, without any requirement of further
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
consent by the spouse. In such event, no further spousal consent
shall be required, provided that any change of Beneficiary or
optional form of benefit does not exceed any limit (contained in
such spousal consent) on the Member's right to change any
Beneficiary or optional form of benefit. Any spousal consent shall
be deemed to be revocable unless it is expressly made irrevocable at
the election of the Member's spouse.
Notwithstanding the preceding paragraph, the Member's election
to waive the QJSA and/or the QPSA shall be effective if it is
established to the satisfaction of the Administrative Committee that
the consent required in the immediately preceding paragraph may not
be obtained because (1) there is no spouse, (2) the spouse cannot be
located, (3) the Member has provided a duly certified copy of a
court order issued by a court of competent jurisdiction which
recognizes that the Member is legally separated or has been
abandoned (under applicable local law) and the Administrative
Committee has not received a duly certified copy of a qualified
domestic relations order (described in Section 414(p) of the Code)
which requires spousal consent, or (4) there exist such other
circumstances (as are prescribed under Sections 401(a) and/or
417(a)(2) of the Code) which obviate the necessity of obtaining the
consent described in the preceding paragraph. In addition, if the
surviving spouse is not legally competent to give consent, such
spouse's legal guardian, which may be the Member, may give the
required consent. Any consent by the Member's spouse (or
establishment that the consent of a Member's spouse may not be
obtained) shall be effective only with respect to such spouse. Any
election of a Member (to waive the QJSA and/or the QPSA) which
otherwise meets the above requirements of this paragraph shall
become inoperative in the event (1) any missing spouse is located or
(2) any other circumstances which earlier precluded the necessity of
obtaining consent of the Member's spouse no longer exist.
For purposes of this Section, if a Member and his spouse are
divorced prior to the Annuity Starting Date, any valid elections
made while the Member was married to his former spouse will remain
valid, unless otherwise provided under a qualified domestic
relations order described in Section 414(p) of the Code, or unless
the Member changes the election or remarries. If a Member dies after
the Annuity Starting Date, the surviving spouse to whom he was
married on the Annuity Starting Date is entitled to survivor benefit
protection under any nonwaived QJSA even if such spouse and Member
are not married when the Member dies. In addition, a former spouse
will be treated as the Member's spouse or surviving spouse to the
extent provided under a qualified domestic relations order described
in Section 414(p) of the Code. Provided, however, where, because of
a qualified domestic relations order, more than one individual is
treated as the surviving spouse, the total amount to be paid as a
QPSA or the survivor portion of a QJSA shall not exceed the amount
that would have been paid if there were only one surviving spouse.
Any such payment to each deemed surviving spouse shall be based on
the life of each such spouse.
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
(iv) NOTICE REQUIREMENTS. Within a reasonable period of time
which shall not be less than thirty (30) days and not more than
ninety (90) days before the Annuity Starting Date, each Member shall
receive (by mail, personal delivery, permanent posting, repeated
publication or similar means which would normally ensure the
continued attention of such Member during the applicable election
period described above) the following information written in
nontechnical language: (1) a general description and explanation of
the terms and conditions of the QJSA, (2) the circumstances under
which the QJSA will be provided unless the Member elects to waive
such form, (3) a general explanation of the Member's right to elect
to waive the QJSA form of benefit and the effect of such waiver, (4)
a general explanation of the rights of the Member's spouse and the
need to obtain the consent of the Member's spouse in the event that
the Member desires to waive the QJSA and the effect of failure to
obtain any such consent required hereunder, and (5) a general
explanation of the Member's right to revoke any election to waive
the QJSA form of benefit and the effect of such revocation.
Similarly, within the notification period described below, each
Member shall receive (in the same manner as described above for the
QJSA) a written explanation with respect to the QPSA comparable to
that required above regarding the QJSA. For purposes of the previous
sentence, the notification period means whichever of the following
periods ends last: (1) the period beginning with the first day of
the Plan Year in which the Member attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which the Member
attains age 35, (2) a reasonable period ending after the Employee
becomes a Member, (3) a reasonable period ending after Section
401(a)(11) of the Code applies to the Member, and (4) a reasonable
period ending after separation from service in the case of a Member
who separates before attaining age 35. A reasonable period ending
after the events described in clauses (2) and (3) of the previous
sentence is the end of the one-year period beginning with the date
that the applicable event occurs. The notification period for the
events described in the previous sentence begins one year prior to
the occurrence of the applicable event. The notification period for
the event described in clause (4) of the third preceding sentence
begins one year before the separation from service and ends one year
after such separation.
(v) DISTRIBUTION OF QPSA. Distribution of any QPSA payable
hereunder shall be made as soon as practicable, but (absent
circumstances beyond the control of the Administrative Committee and
the Trustee) in no event later than 60 days after the end of the
Plan Year in which the Member's date of death occurs. In no event
shall the distribution of any such QPSA be delayed for a period
which would contravene applicable provisions of Section 401(a)(9) of
the Code.
(vi) GENERAL COMPLIANCE. The provisions of this Section are
intended to comply with the requirements of Sections 401(a)(11) and
417 of the Code. To the extent that any provision hereof is
inconsistent with the preceding sentence, such provision shall be
deemed to be inoperative and the Plan shall be operated in a
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
manner which complies with the requirements of the immediately
preceding sentence.
(c) SPECIAL RULES: Notwithstanding the above requirements of
Sections 6.6(a) but subject to the annuity requirements of 6.6(b), if
applicable, distribution on behalf of any Member, including a Key Employee
in a Top-Heavy plan (as such terms are defined in Section 7.4), may be
made in accordance with the following requirements of this Section 6.6(c))
(regardless of when such distribution commences):
(i) The distribution by the Plan is one which would not have
disqualified such Plan under Section 401(a)(9) of the Code as in
effect prior to amendment by TEFRA or the Tax Reform Act of 1984;
(ii) The distribution is in accordance with a method of
distribution designated by the Member whose interest in the Plan is
being distributed or, if the Member is deceased, by a Beneficiary of
such Member;
(iii) Such designation was in writing, was signed by the
Member or the Beneficiary, and was made before January 1, 1984;
(iv) The Member had accrued a benefit under the Plan or any
Prior Plan as of December 31, 1983; and
(v) The method of distribution designated by the Member or the
Beneficiary specifies the time at which distribution will commence,
the period over which distributions will be made, and in the case of
any distribution upon the Member's death, the Beneficiaries of the
Member listed in order of priority.
A distribution upon death will not be covered by this subsection
unless the information in the designation contains the required
information described above with respect to the distributions to be made
upon the death of the Member. For any distribution which commences before
January 1, 1984, but continues after December 31, 1983, the Member, or the
Beneficiary, to whom such distribution is being made, will be presumed to
have designated the method of distribution (under which the distribution
is being made) if the method of distribution was specified in writing and
the distribution satisfies the requirements of applicable law. If a
designation is revoked, any subsequent distribution must satisfy the
requirements of Section 401(a)(9) of the Code. If a designation is revoked
subsequent to the date distributions are required to begin, the Plan must
distribute by the end of the calendar year following the calendar year in
which the revocation occurs the total amount not yet distributed which
would have been required to have been distributed to satisfy Section
401(a)(9) of the Code, but for the Section 242(b)(2) election. For
calendar years beginning after December 31, 1988, such distributions must
meet the minimum distribution incidental benefit requirements set forth in
Section 1.401(a)(9)-2 of the proposed Income Tax Regulations or any
successor regulation. Any changes in the designation will
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
be considered to be a revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one not named in the
designation) under the designation will not be considered to be a
revocation of the designation, so long as such substitution or addition
does not alter the period over which distributions are to be made under
the designation, directly or indirectly (for example, by altering the
relevant measuring life). In the event that an amount is transferred or
rolled over from one plan to another plan, the rules set forth in the
regulations or other authority issued under Section 401(a)(9) of the Code
shall apply.
(d) SPECIAL RULES REGARDING ELIGIBLE ROLLOVER DISTRIBUTIONS:
Effective for distributions made after December 31, 1992, the Employer
shall impose income tax withholding at a flat rate of twenty percent (20%)
on any "eligible rollover distribution" (defined below) from the Plan that
is not transferred directly to an "eligible retirement plan" (defined
below). The Employer shall provide a notice to the recipient of a Plan
distribution prior to making the distribution, which notice shall
generally explain the tax withholding and rollover rules that apply to
such distribution. The requirements of this Section 6.6(d) shall be
construed in accordance with Section 401(a)(31) of the Code.
(i) Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this
Section 6.6(d), 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 (other than, if
applicable, any portion attributable to the offset of the Member's
outstanding loan balance pursuant to the Plan's loan procedures, if
any) paid directly to an eligible retirement plan specified by the
distributee in a direct rollover. The provisions of this Paragraph
shall apply only if the Member's eligible rollover distributions
during the Plan Year are reasonably expected to total $200 or more
or, if less than 100% of the Member's eligible rollover distribution
is to be a direct rollover, the direct rollover is $500 or more.
Prior to any direct rollover pursuant to this Paragraph, to the
extent required by the Administrative Committee, the distributee
shall furnish the Administrative Committee with a statement from the
plan administrator or trustee of the qualified plan, or the trustee
or custodian of the individual retirement account or annuity, to
which the direct rollover is to be transferred that such plan,
account or annuity is, or is intended to be, an eligible retirement
plan.
(ii) DEFINITIONS.
(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
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
or more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; and the portion
of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(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 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.
(iii) 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 and
Section 6.11 hereof, are distributees with regard to the interest of
the spouse or former spouse.
(iv) DIRECT ROLLOVER: A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the distributee.
6.7 LOST MEMBERS OR BENEFICIARIES; ESCHEAT: If a former Member or
Beneficiary cannot be located within sixty (60) days of the date any benefits
payable under the Plan should be paid or commence to be paid pursuant to Section
6.6, the former Member's entire Account may be forfeited and allocated as any
other forfeiture pursuant to applicable provisions of Section 4.6.
Notwithstanding the preceding sentence, if the former Member or Beneficiary
files a valid claim pursuant to Section 6.10 for the forfeited benefits payable
under the Plan, then (i) as soon as administratively practicable, the forfeited
benefits payable to such former Member or Beneficiary shall be reinstated
effective as of the date of receipt of the claim and (ii) as soon as
administratively practicable following the Employer's Contribution (pursuant to
applicable provisions of Section 3.3) of an amount equal to the value of such
forfeited benefits, the value of the reinstated benefits shall be paid pursuant
to Section 6.6.
Should the Plan be joined as a part to any escheat proceedings concerning
rights to any benefits payable to a former Member or Beneficiary, the Plan shall
comply with any final judgment (of the appropriate court declaring that title to
any benefits payable under the Plan to a former Member or Beneficiary vests in
the State) by (i) treating the judgment as if it were a claim filed by the
former Member or Beneficiary on the effective date of the final judgment and
(ii) paying the State as if it were the former Member or Beneficiary who filed
the claim for benefits which the court determined to have escheated to the
State.
::ODMA\PCDOCS\HOUSTON\998884\1
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6.8 WITHDRAWALS BY MEMBERS:
WITHDRAWAL OF EMPLOYER CONTRIBUTIONS: Subject to the conditions of this
Section, upon giving written notice to the Administrative Committee, any Member
who is suffering an immediate and heavy financial hardship (i) because of
expenses previously incurred, or necessary to be incurred, for medical care
described in Section 213(d) of the Code (not covered by insurance or otherwise
reimbursable from any other source) of the Member, the Member's spouse or any
other person who qualifies as a dependent of the Member under Section 152 of the
Code, (ii) due to lack of funds required to pay expenses and/or other amounts
required (excluding mortgage payments) to effect the purchase of a principal
residence for the Member, (iii) due to a lack of funds required to make any
payment required to avoid eviction from the Member's principal residence, or
(iv) due to lack of funds required to make any payment required to avoid
foreclosure on the Member's principal residence, or (v) due to a lack of funds
to pay tuition or related educational fees for the next twelve (12) months of
post-secondary education for the Member, the Member's spouse or dependents
(described above), shall be entitled to withdraw from his Account, in the order
of priority set out below, an amount equal to the lesser of (A) the amount
needed to alleviate the hardship or (B) the Distributable Amount (defined below)
then credited to the Member's Account. The requested withdrawal under clause (A)
of the immediately preceding sentence may include an additional amount necessary
to pay any federal, state or local income taxes or penalties (including
additional taxes under Section 72(t) of the Code) that are reasonably expected
to result from the withdrawal. For purposes of clause (B) of the second
preceding sentence, in accordance with Section 1.401(k)- 1(d)(2)(ii) of the
Income Tax Regulations, the Distributable Amount shall be equal to the Member's
total Salary Reduction Contributions credited to his Employer Nonforfeitable
Contributions Account as of the date of withdrawal; provided, however, the
Distributable Amount shall be increased by any Qualified Nonelective
Contributions and net earnings and appreciation on Salary Reduction
Contributions and Qualified Nonelective Contributions that were credited to the
Member's Nonforfeitable Contributions Account as of December 31, 1988. The
Distributable Amount shall not include any (i) Qualified Nonelective
Contributions and (ii) earnings and appreciation, that were credited to the
Member's Nonforfeitable Contributions Account after December 31, 1988. Any such
Member who is entitled to a QJSA and/or a QPSA described in Section 6.6(b) shall
not be entitled to make a withdrawal hereunder unless such Member's spouse
consents to such withdrawal in a manner which complies with the requirements of
a spousal consent under Section 6.6(b). The requested withdrawal may also
include an additional amount necessary to pay any federal, state or local income
taxes or penalties (including additional taxes under Section 72(t) of the Code)
that are reasonably expected to result from the withdrawal.
Except as may otherwise be prescribed by the Administrative Committee
under nondiscriminatory rules, withdrawals permitted hereunder shall be made in
the following order: first, the Employee Prior Plan Account, if any; second, the
Employee Rollover Account, if any; third, the Employer Contributions Account,
whereunder the Member shall effect withdrawal first from amounts attributable to
any Profit Sharing Contributions and any income and increments thereon, and
next, from any Matching Contributions and any income and increments thereon; and
fourth, subject to the preceding paragraph, the Employer Nonforfeitable
Contributions Account, whereunder the Member shall effect such withdrawal first
from amounts attributable to any Qualified
::ODMA\PCDOCS\HOUSTON\998884\1
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Nonelective Contributions and any income and increments thereon, next, from any
Profit Sharing Contributions and any income and increments thereon, and lastly
from Salary Reduction Contributions and any income or increments thereon. The
entire withdrawable balance then credited to the applicable account described in
the preceding sentence must be withdrawn before withdrawals may be made from the
next account. All other amounts credited to such Member's Account and not
withdrawn shall remain in such Member's Account.
If a withdrawal is made at a time when the Member is not fully vested in
his Employer Contributions Account and such Member can increase his vested
percentage in his Employer Contributions Account, the Member's vested interest
in his Employer Contributions Account at any relevant time will be determined
under the following formula: X = P(AB + D)-D. For purposes of applying the
formula: P is the vested percentage at the relevant time; AB is the Employer
Contributions Account balance at the relevant time; and D is the amount of the
withdrawal.
A Member shall not be considered as suffering an immediate and heavy
financial hardship unless such Member submits to the Administrative Committee
(i) written evidence (satisfactory to the Administrative Committee) of such
hardship and the amount needed to alleviate the hardship (ii) and any other
written agreement or other documentation which the Administrative Committee
deems to be necessary or appropriate in order to ensure that the Member
understands and will comply with the requirements of this Section. Absent actual
knowledge to the contrary, any Member shall be deemed to have met the
requirements of the immediately preceding sentence if the Member complies with
the requirements of the next sentence and if he submits a written request in
which he specifically identifies the hardship and attaches a photocopy of (i)
bills for medical care (described in the first paragraph of this Section)
previously incurred or physician's reports and other evidence of medical care to
be incurred, (ii) a contract to purchase property which he represents to be his
principal residence, (iii) a notice or other evidence of imminent eviction from
property which the Member represents to be his principal residence, (iv) a
notice or other evidence of imminent foreclosure action with respect to property
which the Member represents to be his principal residence, (v) enrollment or
registration forms or other evidence of tuition and related educational fees due
for the next twelve (12) months of post-secondary education, or (vi) other
evidence of the claimed hardship and the amount of funds required to alleviate
such hardship.
In addition, the Member must represent in writing that (i) his financial
need cannot be relieved through reimbursement or compensation by insurance or
otherwise, (ii) his financial need cannot be relieved through liquidation of any
of his remaining assets (or any remaining assets of his spouse or minor children
that are readily available to him) without such liquidation itself causing an
immediate and heavy financial hardship, (iii) his financial need cannot be
relieved through his cessation of any contributions authorized by such Member to
the Plan, (iv) the Member has received or applied for all other distributions
available to him from plans maintained by the Employer and any other employer,
and such distributions have not or will not relieve the claimed financial
hardship, and (v) such Member has received or applied for all nontaxable loans
available to him from plans maintained by the Employer (or any other employer)
and from commercial sources, and such loans have not or will not relieve the
claimed financial hardship. For purposes of this paragraph, a need cannot
reasonably be relieved by one of the actions listed in items (i) through (v)
above if the
::ODMA\PCDOCS\HOUSTON\998884\1
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effect would be to increase the amount of the need. For example, the need for
funds to purchase a principal residence cannot reasonably be relieved by a Plan
loan if the loan would disqualify the employee from obtaining other necessary
financing.
The Administrative Committee shall have no duty or obligation to
independently investigate or verify the truth or accuracy of any representation
of the Member or the authenticity or accuracy of any documentary evidence
provided by the Member and, absent actual knowledge to the contrary, the
Administrative Committee shall assume that any such representation is true and
correct and any such documentary evidence is authentic and correct.
Any withdrawal hereunder shall result in suspension (for a period of 12
months after the Member's receipt of amounts withdrawn hereunder) of Salary
Reduction Contributions and any other elective deferrals (described in Section
402(g)(3) of the Code) and any employee contributions described in Section
401(m) of the Code under any other plan of deferred compensation maintained by
the Employer and/or any Affiliated Employer. The term "any other plan of
deferred compensation" as used in the immediately preceding sentence shall mean
any plan of deferred compensation maintained by the Employer or any Affiliated
Employer, including stock option, stock purchase and similar plans, as well as a
cash or deferred arrangement under a cafeteria plan described in Section 125 of
the Code, but excluding health or welfare benefit plans and excluding the
mandatory contributions portion of any defined benefit plan maintained by the
Employer or any Affiliated Employer. Accordingly, as a prior condition of any
hardship withdrawal, the Member shall execute any written agreement or other
document that the Administrative Committee deems necessary to ensure that during
the one-year suspension period, the Member is on notice and will comply with
requirements of Section 401(k) of the Code.
In addition, under the Plan and any other plan maintained by the Employer
and/or any Affiliated Employer, the Member may not authorize Salary Reduction
Contributions or any other elective deferrals (described in Section 402(g)(3) of
the Code) for the Member's taxable year next following the taxable year of
receipt of the amount withdrawn hereunder which are in excess of the applicable
dollar limit under Section 402(g) of the Code for such next taxable year, less
the amount of such Member's Salary Reduction Contributions and any other
elective deferrals (described above) for the Member's taxable year of receipt of
the amount withdrawn hereunder.
No withdrawal hereunder shall result in any forfeiture of a Member's
vested Account balance and no repayment of amounts withdrawn in order to wholly
or partially restore a withdrawing
Member's Account shall be permitted.
Subject to the rules established under Section 4.10, for purposes of
allocating appreciation or depreciation and income or loss of the Trust Fund,
such withdrawal shall be subtracted from the Member's Employer Account balance
at the beginning of the applicable accounting period in which the withdrawal is
made. A Member shall not be allowed to make more than one withdrawal from his
Employer Account under this Section during any given Plan Year.
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6.9 CLAIMS PROCEDURE FOR BENEFITS: When a benefit is due under the Plan, a
claim should be submitted to the personnel office of the Employer by which the
Member is or was employed. Under normal circumstances a final decision on a
claimant's request for benefits shall be made within ninety (90) days after
receipt of the claim. However, if special circumstances require an extension of
time to process a claim, a final decision may be deferred up to one hundred
eighty (180) days after receipt of the claim if, prior to the end of the initial
ninety (90) day period, the claimant is furnished with written notice of the
special circumstances requiring the extension and the anticipated date of a
final decision. If the claim is denied, within the applicable period of time set
out above, the claimant shall receive written notification of the denial, which
notice shall set forth the specific reasons for the denial, the relevant Plan
provisions on which the denial is based, and the claims review procedure under
the Plan. In the event that a claim is denied, or in the event that no action is
taken on the claim within the above-described period(s) of time, the following
procedure shall be used:
(a) First, in the event that the claimant does not timely receive
the above-described written notification, the claimant's request for
benefits shall be deemed to be denied as of the last day of the relevant
period and the claimant shall be entitled to a full review of his claim in
accordance with the following provisions of this Section.
(b) Second, a claimant is entitled to a full review of his claim
after actual or constructive notification of a denial. A claimant desiring
a review must make a written request to the Administrative Committee
requesting such a review, which may include whatever comments or arguments
the claimant wishes to submit. Incident to the review, the claimant may
represent himself or appoint a representative to do so, and will have the
right to inspect all documents pertaining to the issue. The Administrative
Committee, in its sole discretion, may schedule any meeting(s) with the
claimant and/or the claimant's representative that it deems necessary or
appropriate to facilitate or expedite its review of a denied claim.
A request for a review must be filed with the Administrative Committee within
ninety (90) days after the denial of the claim for benefits was actually or
constructively received by the claimant. If no request is received within the
90-day time limit, the denial of benefits will be final. However, if a request
for review of a denied claim is timely filed, the Administrative Committee must
render its decision under normal circumstances within sixty (60) days of its
receipt of the request for review. In special circumstances the decision may be
delayed if, prior to expiration of the initial 60-day period, the claimant is
notified of the extension, but must in any event be rendered no later than one
hundred twenty (120) days after receipt of the request. If the decision on
review is not furnished to the claimant within the applicable time period(s) set
above, the claim shall be deemed denied on the last day of the relevant period.
All decisions of the Administrative Committee shall be in writing and shall
include specific reasons for whatever action has been taken, including the
specific Plan provisions on which the decision is based.
6.10 LOANS TO MEMBERS AND BENEFICIARIES:
::ODMA\PCDOCS\HOUSTON\998884\1
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(a) Effective as of January 1, 1992, loans may be permitted from
time to time, as determined by the Administrative Committee, to any (i)
Member or (ii) former Member, Beneficiary, or alternate payee under a
qualified domestic relations order described in Section 414(p) of the
Code, who is a "party in interest," as defined in Section 3(14) of the
Act, or a "disqualified person," as defined in Section 4975(e)(2) of the
Code, and (iii) on whose behalf an Account or subaccount is maintained
under the Plan (hereinafter an individual described in clause (i) or (ii)
and (iii) shall be referred to as a "Qualified Participant"). For purposes
of this Section, a "loan" shall include any modification to an existing
loan hereunder so long as, at the time of any such modification, the
requirements of this Section are met. Any action taken by the
Administrative Committee shall be communicated to Qualified Participants
at such time and in such manner as shall be prescribed by the
Administrative Committee. Any duties allocated to the Administrative
Committee under this Section may be delegated by the Administrative
Committee, by action or in writing, to an Employee or Employees appointed
by the Administrative Committee.
A Qualified Participant may borrow from his vested Account balance
under the Plan, subject to the following provisions of this Section and to
such additional rules or guidelines as the Administrative Committee may
adopt hereunder. Loan application forms (hereinafter referred to as the
"application forms") shall (i) specify the terms pursuant to which the
loan is requested to be made, (ii) authorize the repayment of the loan
through payroll deductions in accordance with subsection (c) of this
Section if the Qualified Participant is an Employee, or authorize a
procedure whereby the Qualified Participant is to pay monthly in
accordance with subsection (c) of this Section if the Qualified
Participant is not an Employee, (iii) provide such additional information
and documentation as the Administrative Committee shall require, and (iv)
include a note and security agreement, duly executed by the Qualified
Participant, pursuant to which the Qualified Participant promises to repay
the note and grants a security interest, as described in subsection (c) of
this Section, to secure repayment of the loan and the note.
(b) The Administrative Committee shall issue rules or guidelines
("Standards") which shall not be inconsistent with applicable provisions
of the Code and the Act and which shall be uniformly applicable to all
Qualified Participants similarly situated and shall govern the
Administrative Committee's approval or disapproval of completed
application forms. Under such Standards, the Administrative Committee
shall consider the Qualified Participant's creditworthiness and credit
history, fair market value and liquidity of the Qualified Participant's
collateral to be pledged as security for the loan, and any other factors
which the Administrative Committee determines are considered in a normal
commercial setting by a commercial lender. To the extent not inconsistent
with the requirements of applicable provisions of the Code and the Act,
the Standards shall prescribe the manner for determining the annual rate
of interest to be charged on each loan to a
::ODMA\PCDOCS\HOUSTON\998884\1
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Qualified Participant under the Plan. Without limiting the scope of the
immediately preceding sentence, such annual rate of interest for such
loans must provide the Plan with an annual rate of return commensurate
with the prevailing interest rate charged on similar commercial loans by
persons in the business of lending money for loans which would be made
under similar circumstances. In addition, the Standards may provide for
assessment of a fee for processing loan application forms, obtaining
credit reports, collection and processing late payments, and similar
administrative expenses which amounts shall be charged directly to the
Account of the affected Qualified Participant. The Administrative
Committee shall from time to time prescribe such additional Standards that
it deems to be necessary or appropriate and which are consistent with
proper lending practices.
(c) Subject to applicable provisions of this Section, following
receipt of a properly completed application form, each Qualified
Participant who, pursuant to the Standards, the Administrative Committee
determines to be credit worthy and to be able to provide the requisite
security shall be entitled to borrow from his Account an amount which
(when added to the outstanding balance of all other loans to the Qualified
Participant under all "qualified employer plans," as defined in Section
72(p)(4) of the Code, of the Employer and any Affiliated Employers) is not
in excess of the lesser of (i) $50,000, reduced by the excess, if any, of
(a) the highest outstanding balance of such loans during the one-year
period ending on the day before the latest date on which a loan was made,
over (b) the outstanding balance of such loans on the latest date on which
a loan was made, or (ii) one-half (1/2) of the present value of the vested
account balance of the Qualified Participant under the Plan as of the most
recent valuation date. Any modification of an existing loan hereunder
shall be deemed to be a new loan for purposes of this Section. Any such
loan shall be secured by such Qualified Participant's vested interest in
his Account balance; provided however, such security interest may not
exceed one-half of such Account balance immediately after the origination
of each loan hereunder. In addition, any loan originated or modified
hereunder with respect to a Qualified Participant who is an Employee shall
be repaid by payroll deduction pursuant to a substantially level
amortization schedule as provided in the Standards issued by the
Administrative Committee (with payments not less frequently than
quarterly) over the term of the loan. Any such loan issued hereunder to a
Qualified Participant who is not an Employee shall be repaid monthly by
the Qualified Participant in accordance with a substantially level
amortization schedule as provided in the Standards issued by the
Administrative Committee (with payments not less frequently than monthly)
over the term of the loan. No loan shall have a maturity date in excess of
five (5) years, unless the 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 a principal residence of the Member.
Any loan may be prepaid without penalty, if the Qualified
Participant repays the full amount of the loan, plus all interest accrued
and unpaid thereon; provided,
::ODMA\PCDOCS\HOUSTON\998884\1
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however, partial payments on a loan may be permitted by the Administrative
Committee pursuant to nondiscriminatory rules established by the
Administrative Committee which are applicable to similarly situated
Qualified Participants.
Notwithstanding any other provision to the contrary, (i) no loan
shall be made to any Qualified Participant who is or was either an "owner
employee" or is a "shareholder employee" of any Employer that is an S
corporation within the meaning of such terms under Section 4975(d) of the
Code, (ii) no Qualified Participant shall be entitled to a loan from the
Trustee if the amount of the requested loan is less than $1,000, (iii)
except as may otherwise be prescribed by the Administrative Committee from
time to time and communicated to Qualified Participants, no Qualified
Participant shall be entitled to originate more than one loan during any
single Plan Year, (iv) no Qualified Participant will be eligible to
receive a new Plan loan while he has an outstanding Plan Loan, and (v) no
Qualified Participant shall be entitled to a loan from the Trustee if the
making of the loan would interfere with the orderly management of the Plan
for the benefit of all the Qualified Participants or otherwise contravene
any applicable law or regulation.
Any Qualified Participant who is entitled to a QJSA and/or a QPSA
described in Section 6.6(b) must obtain any consent required of his or her
spouse under Section 6.6(b) within the 90-day period before the time any
portion of the Qualified Participant's Account balance is used as security
for the loan. Except as provided below, a new consent is required if the
Account balance is used for any increase in the amount of security and,
for purposes of obtaining spousal consent, any renegotiation, extension,
renewal or other revision of a loan shall be treated as a new loan made on
the date of the renegotiation, extension, renewal or other revision. Any
such consent may provide that the spouse consents to use of the Qualified
Participant's Account as security for any future loans without any
requirement of any further consent by the spouse and, in such event, no
further spousal consent will be required. The spouse's consent shall
comply with the requirements of Section 6.6(b), but shall be deemed to
meet any requirements contained in such Section relating to the consent of
any subsequent spouse.
(d) Any loan or loans to a Qualified Participant hereunder shall not
be made as an investment of the Trust Fund but instead shall be considered
to be an earmarked investment of the Qualified Participant's Account. A
subaccount shall be established for the Qualified Participant and shall be
maintained until the loan or loans are repaid in full. Such loan or loans
shall be the only investment of such subaccount and thus such subaccount
shall not be taken into account for purposes of determining or allocating
income, gains or losses of any commingled portion of the Trust Fund and
all costs, charges, fees or expenses in connection with acquisition and
disposition of such investment of the subaccount shall be charged directly
to such subaccount.
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
(e) The Administrative Committee or its delegate shall, in
accordance with the Standards, review and approve or disapprove completed
application forms as soon as practicable after its receipt thereof, and
shall promptly notify the applying Qualified Participant of the
disposition of his application form. The Administrative Committee shall
have the authority to delegate the power to review and approve or
disapprove loans under this Section to a Plan Loan Administrator or such
other agents as the Administrative Committee deems appropriate, provided
that any such agent shall act in accordance with the Standards established
by the Administrative Committee pursuant to this Section.
(f) The unpaid balance owed by a Qualified Participant on a loan
under the Plan shall not reduce the amount credited to his Account under
the Plan. However, from the time of payment of the proceeds of the loan to
the Qualified Participant, his Account balance shall be deemed invested,
to the extent of such unpaid loan balance, in such loan until the complete
repayment thereof or distribution from such Account. At the time a loan is
made, the amount loaned shall first be deemed an investment of, and
allocated to, the Qualified Participant's individual investment accounts
maintained under his Account, and the loan proceeds shall be withdrawn
pro-rata from each of the investment funds within which such individual
accounts are invested.
(g) Except in the event of application of a Qualified Participant's
Account balance to repayment of a loan in the event of a default in
accordance with subsection (j) of this Section, no withdrawal may be made
by a Qualified Participant under Section 6.8 of any amount deemed invested
in the outstanding balance of any loan made pursuant to this Section.
(h) The amount of any distribution otherwise payable to a Qualified
Participant shall be reduced by the amount owed (including any accrued
interest) on all loans of the Qualified Participant at the time of such
distribution. The Trustee shall apply the pledged portion of the Qualified
Participant's Account to be distributed or paid toward the liquidation of
the Qualified Participant's indebtedness to the Plan and the Trustee. Such
reduction shall constitute a complete discharge of all liability to the
Plan and the Trustee for the loan to the extent of such reduction.
(i) Repayment of all loans under the Plan shall be secured by the
Qualified Participant's vested Account balance in accordance with
applicable provisions of subsection (c) of this Section; provided,
however, that repayment shall be secured by the Qualified Participant's
vested interest in his Account only for such time and to the extent that a
portion of such loan is allocated to such Account. Any loan repayment
shall first be credited as soon as practicable to the Qualifying
Participant's segregated subaccount. Such credited amounts shall be
transferred as soon as practicable following receipt to the individual
accounts of the Qualified Participant from which the assets were released
upon establishment of the segregated
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
subaccount, and shall thereafter be invested as part of the Trust Fund. A
Qualified Participant may prepay his loan at any time, without penalty,
provided that he pays the full amount of the loan, including accrued
interest.
If the Qualified Participant should cease to be an Employee for any
reason but no distribution is made under the Plan with respect to such
Qualified Participant, or if the loan is to a Qualified Participant who is
a former Member or a Beneficiary and no distribution is made under the
Plan with respect to such Qualified Participant, then the Qualified
Participant may make all repayments due on his outstanding loan by
personal check or money order in accordance with the Qualified
Participant's repayment schedule.
(j) In the event of failure to make any payment of principal or
interest under a loan when due, the loan shall be in default ("Default")
and all the unpaid balance owed by the Qualified Participant and all
accrued but unpaid interest shall be due and payable immediately.
Following a Default, the Administrative Committee and the Trustee may
apply any pledged portion of the vested Account balance of the Qualified
Participant to pay the loan, in whole or in part, and take any other
action or remedy as allowed by law, provided that no application of a
Qualified Participant's vested Account balance shall occur prior to the
time such vested Account balance is otherwise distributable under the
terms of the Plan, except as permitted by the Code and the Act. The amount
of any withdrawal or distribution from the vested Account balance of a
Qualified Participant or Beneficiary following a Default shall then be
reduced by the amount of any loan in Default and such amount shall be
applied to the unpaid loan balance and any accrued but unpaid interest
thereon.
6.11 DISTRIBUTIONS TO DIVORCED SPOUSE: Subject to the provisions of
Section 11.3 which pertain to qualified domestic relations orders ("QDRO") and
pursuant to the QDRO procedures of the Plan, in the event that the
Administrative Committee receives a domestic relations order that it determines
to be a valid QDRO, and if such QDRO provides that distribution of vested
benefits to an alternate payee described therein is not to commence or be made
immediately, but the QDRO provides for the apportionment of such benefits to be
made immediately, the Administrative Committee shall establish a separate
account under the Plan for the alternate payee. Subject to Section 11.3 and the
QDRO procedures of the Plan, if the Administrative Committee receives a domestic
relations order that it determines to be a valid QDRO, and if the QDRO provides
that distribution of vested benefits to an alternative payee described therein
is to commence or be made immediately, then the Administrative Committee shall
direct the Trustee to effect distribution to the alternate payee who, for the
purpose of effecting such distribution, shall be considered and treated as any
other Member who is entitled to receive a benefit payable under the Plan.
The Administrative Committee shall comply with the terms and provisions of
any QDRO, including orders which require distributions to an alternate payee
prior to a Member's "earliest retirement age" as such term is defined in Section
206(d)(3)(E)(ii) of the Act and Section 414(p)(4)(B) of the Code, and shall
establish appropriate procedures to effect the same.
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
If any such distribution pursuant to a QDRO is made at a time when the
Member is not fully vested in his Employer Contributions Account and the Member
can increase his vested percentage in his Employer Contributions Account, the
Member's vested interest in his Employer Contributions Account shall be
determined by the following formula: X = P(AB + D)-D. For purposes of applying
the formula: P is the vested percentage at the relevant time; AB is the Employer
Contributions Account balance at the relevant time; and D is the amount of the
distribution. For purposes of allocating income or loss and appreciation or
depreciation of the Trust Fund, such distribution shall be subtracted from the
Member's Account balance at the beginning of the Plan Year (or such other
accounting period prescribed by the Administrative Committee) in which the
distribution is made.
6.12 SPECIAL TRANSITION RULE: Notwithstanding any other provisions of the
Plan to the contrary, if the Plan is retroactively effective with respect to any
Plan Year, the benefits payable under the Plan to any Member who terminated
employment during such Plan Year (or other applicable accounting period) shall
be determined with reference to the special transition rules of Sections 1.2,
4.11 and 11.5.
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<PAGE>
ARTICLE VII
TOP-HEAVY PLAN PROVISIONS
Capitalized terms used in this Article VII which are not otherwise defined
in Article I of the Plan are defined in Section 7.4.
7.1 GENERAL RULES FOR DETERMINING TOP-HEAVY STATUS: In order to determine
whether the Plan is Top-Heavy for a Plan Year, it is necessary to determine (i)
whether the Employer must be aggregated with other employers which will be
treated as a single employer, (ii) what the Determination Date is for the Plan
Year, (iii) which Employees or former Employees or other individuals who perform
or performed services as owners or employees of any Affiliated Employer which is
not an Employer (whether or not Qualified Plan participants) are, or formerly
were, Key Employees, (iv) which former Employees or other individuals who
performed services as owners or employees of any Affiliated Employer which is
not an Employer (whether or not Qualified Plan participants) have not performed
any service for the Employer (or any Affiliated Employer which is not an
Employer) at any time during the five-year period ending on the Determination
Date, (v) if, at any time during the five-year period ending on the
Determination Date, the Employer and the Affiliated Employers maintain or
maintained Qualified Plans (whether or not terminated) in addition to the Plan,
which Qualified Plans (including the Plan) are required or permitted to be
aggregated to determine Top-Heavy status and (vi) the present value of accrued
benefits (including distributions made during the plan year of the Qualified
Plan(s) and the four preceding plan years of the Qualified Plan(s)) of Key
Employees, former Key Employees and non-Key Employees. For this purpose, the
Employer and all Affiliated Employers must be treated as one employer and the
Employees or former Employees or other individuals who perform or performed
services as owners or employees of any Affiliated Employer which is not an
Employer (whether or not participants in all Qualified Plans maintained by the
Employer and the Affiliated Employers) must be categorized as Key Employees,
former Key Employees or non-Key Employees. Former Key Employees are non-Key
Employees and are excluded entirely from the calculation used to determine if a
plan or aggregation group of plans is Top-Heavy.
With respect to plan years beginning after December 31, 1984, the accrued
benefit of any individual who has not performed any services for the Employer or
any Affiliated Employer at any time during the five-year period ending on the
Determination Date shall be excluded from the calculation used to determine if
the plan or aggregation group of plans is Top-Heavy. In addition, incident to
testing whether any such Plan or group of plans is Top-Heavy, an individual's
present value of accrued benefits is used only once. All Qualified Plans (of the
Employer and the Affiliated Employers) in which a Key Employee participates, and
certain other Qualified Plans, must be aggregated to form the Required
Aggregation Group. Other Qualified Plans may be aggregated with the Required
Aggregation Group to form a Permissive Aggregation Group. Once aggregated, all
Qualified Plans that are required to be aggregated will be Top-Heavy Plans only
if the aggregation group is Top-Heavy. No Qualified Plan in the Required
Aggregation Group will be Top-Heavy if the Required Aggregation Group is not
Top-Heavy. If a Permissive Aggregation Group is TopHeavy, only those Qualified
Plans which are part of the Required Aggregation Group shall be treated as
Top-Heavy Plans subject to the provisions of this Article VII.
7.2 COMPUTATION OF PRESENT VALUE OF ACCRUED BENEFITS:
(a) DEFINED CONTRIBUTION PLAN(S): The present value of accrued
benefits as of the Determination Date for any individual who is a
participant in a Qualified Plan which is (or is treated as) a defined
contribution plan is the sum of (i) the account balance as of the most
recent valuation date occurring within a 12-month period ending on the
Determination Date, and (ii) an adjustment for contributions due as of the
Determination Date. In the case of such a Qualified Plan not subject to
the minimum funding requirements of Section 412 of the Code, the
adjustment in (ii) is generally the amount of any contributions actually
made after the valuation date but on or before the Determination Date.
However, in the first plan year of the Qualified Plan, the adjustment in
(ii) should also reflect the amount of any contributions made after the
Determination Date that are allocated as of a date in that first plan year
of the plan. In the case of a Qualified Plan that is a defined
contribution plan and is subject to the minimum funding requirements, the
account balance in (i) should include contributions that would be
allocated as of a date not later than the Deter mination Date, even though
those amounts are not yet required to be contributed. Thus, the account
balance will include contributions waived in prior years as reflected in
the adjusted account balance and contributions not paid that resulted in a
funding deficiency. The adjusted account balance is described in Rev. Rul.
78-223, 1978-1 C.B. 125. Also, the adjustment in (ii) should reflect the
amount of any contribution actually made (or due to be made) after the
valuation date but before the expiration of the extended payment period in
Section 412(c)(10) of the Code. The account balance of any individual who
has not performed services for the Employer at any time during the 5-year
period ending on the Determination Date shall be disregarded.
(b) DEFINED BENEFIT PLANS: The present value of an accrued benefit
under a Qualified Plan that is a defined benefit plan as of the
Determination Date must be determined as of the most recent valuation date
which is within a 12-month period ending on the Determination Date. In the
first plan year of a plan, the accrued benefit for a current participant
must be determined either (i) as if the individual terminated service as
of the Determination Date (i.e., the last day of plan year of the plan)
or, (ii) as if the individual terminated service as of the valuation date,
but taking into account the estimated accrued benefit as of the
Determination Date. However, for any other year, the accrued benefit for a
current participant must be determined as if the individual terminated
service as of such valuation date. For this purpose, the valuation date
must be the same valuation date used for computing plan costs for minimum
funding, regardless of whether a valuation is performed that year. For pur
poses of this paragraph, present value shall be determined with reference
to the interest rate and mortality table used to determine Actuarial
Equivalent optional
::ODMA\PCDOCS\HOUSTON\998884\1
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benefits under the defined benefit plan. The accrued benefit of a Member
(other than a Key Employee) shall be determined (i) under the method which
is used for accrual purposes for all plans of the Employer or (ii) or if
there is no method described in clause (i), as if such benefit occurred
not more rapidly than the slowest accrual rate permitted under Section
411(b)(1)(c) of the Code. The accrued benefit of any individual who has
not performed services for the Employer at any time during the 5-year
period ending on the Determination Date shall be disregarded.
(c) EMPLOYEE CONTRIBUTIONS: For purposes of determining the present
value of accrued benefits in either a defined benefit or defined
contribution plan, the accrued benefits attributable to employee
contributions are considered to be part of the accrued benefits whether
such contributions are mandatory or voluntary. However, the amounts
attributable to deductible employee contributions are not considered to be
part of the accrued benefits.
(d) DISTRIBUTIONS: For purposes of determining the present value of
accrued benefits, distributions made within the plan year of the Qualified
Plan that includes the Determination Date or within the four preceding
plan years of such plan are added to the present value of accrued benefits
in testing for topheaviness. However, in the case of distributions made
after the valuation date and prior to the Determination Date, such
distributions are not included as distributions in Section 416(g)(3)(A) of
the Code to the extent that such distributions are included in the present
value of the accrued benefits as of the valuation date. In the case of the
distribution of an annuity contract, the amount of such distribution is
deemed to be the current actuarial value of the contract, determined on
the date of the distribution. Benefits paid on account of death are
treated as distributions hereunder to the extent such benefits do not
exceed the present value of accrued benefits immediately prior to death.
(e) ROLLOVER CONTRIBUTIONS AND PLAN-TO-PLAN TRANSFERS: With respect
to proper treatment of rollover contributions and plan-to-plan transfers
incident to determining the present value of accrued benefits, it must
first be determined whether the rollovers and plan-to-plan transfers are
unrelated (both initiated by the employee and made from a plan maintained
by one employer to a plan maintained by another employer) or whether they
are related (a rollover either not initiated by the employee or made to a
plan maintained by the same employer). For purposes of determining whether
the employer is the same employer, all employers aggregated under Section
414(b), (c), (m) or (o) of the Code are treated as the same employer.
Thus, the Employer and all Affiliated Employers are to be treated as a
single employer. In the case of unrelated rollovers, (i) the plan
providing the distributions shall count the distribution as a distribution
under Section 416(g)(3)(B) of the Code and (ii) the plan accepting the
rollover shall not consider the rollover part of the accrued benefit if
such rollover was accepted after December 31, 1983, but must consider it
part of the accrued benefit if such rollover was accepted prior to January
1, 1984. In the case
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
of related rollovers, the plan providing the rollover shall not count the
rollover as a distribution under Section 416(g)(3)(B) of the Code and the
plan accepting the rollover counts the rollover in the present value of
the accrued benefits. Rules for related rollovers do not depend on whether
the rollover was accepted prior to January 1, 1984.
7.3 SPECIAL RULES FOR PLAN YEARS THAT PLAN IS TOP-HEAVY: Notwithstanding
any other provision of the Plan and Trust to the contrary, if the Plan is
Top-Heavy for any Plan Year beginning after December 31, 1983, then the
following provisions shall be applicable and shall supersede and override any
conflicting provision of the Plan for such Plan Year:
(a) VESTING: Vesting of accrued benefits (described in Section
411(a)(7) of the Code and attributable to the Employer Contributions
Account, including bene fits accrued before the effective date of Section
416 of the Code and benefits accrued before the Plan became Top-Heavy)
under the Plan shall be determined in accordance with the vesting table
set out in Section 6.4.
(b) TOP-HEAVY COMPENSATION: Considered Compensation and Top Heavy
Compensation for any one Participant for such Plan Year in excess of
$200,000 or, for Plan Years beginning after December 31, 1993, $150,000
(as adjusted at such time and in such manner as may be prescribed in
Section 401(a)(17) of the Code), shall be disregarded for any Plan Year in
which the Plan is Top-Heavy.
(c) MINIMUM ALLOCATIONS: Subject to the following provisions hereof,
for any Plan Year in which the Plan is Top-Heavy, each Member shall
receive an allocation of the Employer Contribution and forfeitures, if
any, for the Plan Year in an amount equal to the lesser of (i) three
percent (3%) of the Members' Top-Heavy Compensation and (ii) the largest
percentage of Top-Heavy Compensation provided on behalf of any Key
Employee. The minimum allocation shall be made without regard to any
contribution to Social Security. To the extent permitted under applicable
law or other authority issued thereunder by the appropriate governmental
authority, in determining whether an allocation of Employer Contributions
equal to the required percentage of Top-Heavy Compensation meets the
requirements of this Section, all benefits allocated under defined
contribution plans required to be aggregated under Section 7.1 shall be
considered benefits allocated under the Plan and, with respect to Plan
Years beginning after December 31, 1984, any Employer Contribution
attributable to a salary reduction or similar arrangement shall be taken
into account. Accordingly, for the purpose of clarity and without limiting
the scope of the immediately preceding sentence, (i) with respect to Plan
Years beginning after December 31, 1988, any elective deferral (described
in Section 402(g)(3) of the Code) under the Plan or any plan described in
the immediately preceding sentence on behalf of any Member who is not a
Key Employee shall not be treated as an Employer Contribution for purposes
of this Section, but will be treated as an Employer Contribution for
purposes of determining the percentage at which
::ODMA\PCDOCS\HOUSTON\998884\1
VII-3
<PAGE>
Contributions are made for the Key Employee with the highest percentage;
(ii) qualified non Salary Reduction Contributions (described in Section
401(m)(4)(C) of the Code) under the Plan or any plan described in the
immediately preceding sentence on behalf of any Member shall be treated as
an Employer Contribution for purposes of this Section; and (iii) with
respect to Plan Years beginning after December 31, 1988, any matching
contribution (described in Section 401(m)(4)(A) of the Code) under the
Plan or any plan described in the immediately preceding sentence on behalf
of any Member who is not a Key Employee shall not be treated as an
Employer Contribution for purposes of this Section to the extent such
matching contribution is treated as an elective deferral for purposes of
satisfying the actual deferral percentage test of Section 401(k)(3) of the
Code or a matching contribution for purposes of satisfying the actual
contribution percentage of Section 401(m)(2) of the Code.
Notwithstanding the preceding paragraph, in the event that an
Employee is a Member of the Plan and another Qualified Plan which is a
defined benefit plan maintained by the Employer and/or any Affiliated
Employer, such Employee shall not receive both the minimum benefit
provided hereunder and the minimum benefit provided under the defined
benefit plan on account of such plans being Top-Heavy. Instead, the
aggregate minimum benefit requirement for any Employee who is a Member
under the Plan, and any defined benefit plan described in the preceding
sen tence, shall be provided under the defined benefit plan, which defined
benefit minimum shall be offset by the value of the Member's vested and
nonforfeitable interest in his accrued benefit derived from Employer
Contributions under the Plan. If the defined benefit minimum will be paid
in the form of an annuity, the offset shall be effected by converting the
Member's vested accrued benefit derived from Employer Contributions under
the Plan into an annuity (payable in the same form and commencing at the
same time as the defined benefit minimum) which can be provided by the
Member's vested accrued benefit derived from Employer Contributions using
the interest rate and mortality table for immediate annuities published by
the Pension Benefit Guaranty Corporation as in effect on the date the
defined benefit minimum is to commence. If the defined benefit minimum is
paid in the form of a lump sum, the lump sum value of the Member's accrued
benefit derived from Employer Contributions under the Plan shall be offset
against the single sum value of the defined benefit minimum calculated in
accordance with the applicable provisions of the defined benefit plan. For
purposes of this Section, a Member's accrued benefit derived from Employer
Contributions shall include any prior withdrawals or distributions
attributable thereto.
(d) SPECIAL RULES: For any Plan Year that the Plan is (i) Top-Heavy
and the additional minimum benefit described in Section 416(h) of the Code
is not provided or (ii) Super Top-Heavy, the limitations of Section
4.3(d)(iv) and (v) shall be applied by substituting "100 percent" for "125
percent" wherever it appears therein. Such substitution shall not cause a
reduction in any account balances
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
attributable to Contributions for a Plan Year prior to the Plan Year in
which the Plan is Top-Heavy or Super Top-Heavy.
7.4 DEFINITIONS: For purposes of this Article VII, the following terms
shall be defined as follows:
(a) AFFILIATED EMPLOYER: "Affiliated Employer" shall mean the
Affiliated Employer described in Article I of the Plan.
(b) DETERMINATION DATE: "Determination Date" shall mean with respect
to a single Qualified Plan, (i) the last day of the preceding plan year of
the Qualified Plan, or (ii) in the case of the first plan year of the
Qualified Plan, the last day of such plan year. When aggregating Qualified
Plans, the value of accrued benefits will be calculated with reference to
the Determination Dates that fall within the same calendar year.
(c) EMPLOYEE: "Employee" shall mean the Employee described in
Article I of the Plan.
(d) EMPLOYER: "Employer" shall mean the Employer described in
Article I of the Plan.
(e) KEY EMPLOYEE: "Key Employee" shall mean with respect to any
Qualified Plan, any Employee or former Employee (or any other person (i)
who is or was employed by any Affiliated Employer or (ii) who owns or
owned any interest in any Affiliated Employer and who derives or derived
earned income from such Affiliated Employer or would have derived earned
income had such Affiliated Employer had net profits), including any
beneficiary described below, who, at any time during the Qualified Plan's
plan year containing the Determination Date or any of the four (4)
preceding plan years of such Qualified Plan, is:
(i) An officer of any Employer or any Affiliated Employer
treated separately, if such individual earns annual compensation for
a plan year (for services rendered to the Employer and any
Affiliated Employer during the relevant plan year of the Qualified
Plan) greater than fifty percent (50%) of the amount in effect under
Section 415(b)(1)(A) of the Code as in effect for the calendar year
in which such plan year ends for plan years beginning after December
31, 1986 (one hundred fifty percent (150%) of the maximum dollar
limitation set forth under Section 415(c)(1)(A) of the Code as in
effect for the calendar year in which such plan year ends for plan
years beginning prior to January 1, 1987); provided, however,
subject to the last paragraph of this Section 7.4(e), no more than
fifty (50) individuals who are or were Employees of the
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
Employer and/or employees of an Affiliated Employer or, if less, the
greater of three (3) individuals who are Employees of the Employer
and/or employees of an Affiliated Employer or ten percent (10%) of
all such individuals, shall be considered Key Employees by reason of
being officers;
(ii) One of the ten (10) individuals owning (or considered as
owning within the meaning of Section 318 of the Code) both more than
a 1/2 percent interest and the largest interests in the Employer or
any Affiliated Employer, treated separately, if such individual
earns annual compensation for a plan year (for services rendered to
the Employer and any Affiliated Employer during the relevant plan
year of the Qualified Plan) more than the maximum dollar limitation
set forth under Section 415(c)(1)(A) of the Code as in effect for
the calendar year in which such plan year ends; provided, however,
if two such individuals have the same interest in the Employer or
Affiliated Employer, treated separately, the individual earning the
greater compensation (for purposes of this Section 7.4(e)(ii)) shall
be treated as having a larger interest;
(iii) Any individual owning (or considered as owning within
the meaning of Section 318 of the Code) more than five percent (5%)
of the outstanding stock of any corporate Employer or any corporate
Affiliated Employer treated separately, or stock possessing more
than five percent (5%) of the total combined voting power of all
stock of any corporate Employer or any corporate Affili ated
Employer, treated separately, or, if the Employer or Affiliated
Employer is not a corporation, any individual owning more than five
percent (5%) of the capital or profits interest of such Employer, or
Affiliated Employer treated separately; or
(iv) Any individual whose aggregate annual compensation for a
plan year (for services rendered to the Employer and any Affiliated
Employer during the relevant plan year of the Qualified Plan) is
more than $150,000 and who would be described in Section 7.4(e)(iii)
if one percent (1%) were substituted for five percent (5%) therein.
Any Beneficiary of an Employee who is a Key Employee or a former Key
Employee and any Beneficiary of any other individual described above who
is a Key Employee or former Key Employee shall be treated as a Key
Employee or former Key Employee, whichever is applicable. Similarly, any
Beneficiary of an Employee who is a former non-Key Employee and any
Beneficiary of any other individual
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
described above who is a former non-Key Employee shall be treated as a
former non-Key Employee.
For purposes of applying Section 318 of the Code to the provisions
of this Section, subparagraph (C) of Section 318(a)(2) of the Code shall
be applied by sub stituting five percent (5%) for fifty percent (50%). For
purposes of this Section, annual compensation for the plan year of the
Qualified Plan shall include all remuneration described in Treasury
Regulation Section 1.415-2(d) and any successor thereto, but including
amounts contributed by the Employer or Affiliated Employer pursuant to a
salary reduction agreement which are excludable from the individual's
gross income under Section 125, Section 402(a)(8), Section 402(h) or
Section 403(b) of the Code.
In the event that the number of Key Employees determined under
Subsection (e)(i) of this Section would, but for the numerical limitations
of that Subsection, exceed the number determined under that Subsection,
then those officers having the largest annual compensation during the plan
year of the Qualified Plan and the four (4) preceding plan years of such
Qualified Plan shall be the Key Employees. Such term shall not include any
officer or employee of an entity referred to in Section 414(d) of the
Code. Notwithstanding any provision hereof to the contrary, determination
of who is a Key Employee shall be made in accordance with Section
416(i)(1) of the Code.
(f) MEMBER: "Member" shall mean any Member described in Article I of
the Plan except that if the Plan is Top-Heavy, in addition to Employees
who would otherwise be considered to be Members under the Plan, the
following Employees shall be considered to be Members solely for purposes
of determining the individuals entitled to share in the minimum benefit
described in Section 7.3(c): (i) Members who have not separated from
service at the end of the Plan Year, (ii) individuals who are otherwise
eligible to participate in the Plan but who have failed to complete 1000
hours of service (or the equivalent) during the Plan Year, (iii)
individuals who are otherwise eligible to participate in the Plan but who
declined to make any required Contributions to the Plan or, in the case of
a cash or deferred arrangement, any Salary Reduction Contributions
permitted or required under the Plan, or (iv) individuals who are eligible
to participate in the Plan but who have been excluded from the Plan
because each such individual's Considered Compensation is less than a
stated amount.
(g) PERMISSIVE AGGREGATION GROUP: "Permissive Aggregation Group"
shall mean a Required Aggregation Group plus one or more Qualified Plans
which are not part of the Required Aggregation Group but which satisfy the
requirements of Section 401(a)(4) and 410 when considered together with
the Required Aggregation Group.
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
(h) QUALIFIED PLAN: "Qualified Plan" shall mean the Plan and any
other defined contribution plan (whether or not terminated) described in
Section 414(i) of the Code and/or any defined benefit plan (whether or not
terminated) described in Section 414(j) of the Code which is/are (or with
respect to any such plan which has been terminated, was/were) maintained
at any time during the five-year period ending on the Determination Date
by the Employer and/or the Affiliated Employers and intended to meet the
requirements of Section 401(a) of the Code; provided, however, a
simplified employee pension plan described in Section 408(k) of the Code
shall be treated as a defined contribution plan.
(i) REQUIRED AGGREGATION GROUP: "Required Aggregation Group" shall
mean a group of Qualified Plans, which group shall include each Qualified
Plan maintained by the Employer and/or the Affiliated Employers in which a
Key Employee participates in the relevant plan year including the
Determination Date, or any of the four preceding plan years, and which
group shall exclude any Qualified Plan in which a Key Employee does not
participate at any time during the plan year, or any of the four preceding
plan years, unless during such period such Qualified Plan enables any
Qualified Plan in which a Key Employee participates to meet the
requirements of Sections 401(a)(4) or 410 of the Code.
(j) SUPER TOP-HEAVY: "Super Top-Heavy" shall mean Top-Heavy except
for purposes of this Section 7.4(j), "ninety percent (90%)" shall be
substituted for "sixty percent (60%)" wherever the latter percent appears
in Section
7.4(k).
(k) TOP-HEAVY: "Top-Heavy" shall mean with respect to any Qualified
Plan, which is not included in any aggregation group, any such Qualified
Plan where under, as of the Determination Date, the sum of the present
value of the accrued benefits for Key Employees is more than sixty percent
(60%) of the sum of the present value of the accrued benefits of all
Employees of the Employer plus, if applicable, all employees (and
self-employed individuals) of all Affiliated Employers, excluding former
Key Employees, and shall mean with respect to any aggregation group,
Required Aggregation Group or Permissive Aggregation Group, whereunder as
of the Determination Date, the sum of the present value of the accrued
benefits for Key Employees is more than sixty percent (60%) of the sum of
the present value of accrued benefits of all Employees of the Employer
plus all employees (and self-employed individuals) of all Affiliated
Employers, excluding former Key Employees. For purposes of this Section
7.4(k), the accrued benefit of any individual who is not a Key Employee,
but who is a former Key Employee will be disregarded, and, with respect to
Plan Years beginning after December 31, 1984, the accrued benefit of any
individual described in this Section 7.4(k) who has not performed any
service for the Employer and any Affiliated Employer(s) maintaining any
Qualified Plan at any time during the five-year period ending on the
Determina tion Date shall be disregarded. In addition, when aggregating
Qualified Plans, the
::ODMA\PCDOCS\HOUSTON\998884\1
VII-8
<PAGE>
value of accrued benefits will be calculated with reference to the
Determination Dates that fall within the same calendar year.
(l) TOP-HEAVY COMPENSATION: "Top-Heavy Compensation" shall mean with
respect to Plan Years beginning on or after January 1, 1989, (i) the wages
(as defined in Section 3401(a) of the Code for purposes of income tax
withholding at the source) that are paid (within the meaning of Section
1.415-2(d)(3) and (4) of the Income Tax Regulations) to the Employee by
the Employer during the Plan Year for services performed and reportable on
the Employee's form W-2 (or its successor), 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) of the Code),
plus any reduction under a compensation deferral agreement under (a) a
plan described in Section 401(k) or 408(k) of the Code, (b) an annuity
described in Section 403(b) of the Code or (c) an election under a
cafeteria plan described in Section 125 of the Code, (ii) that is actually
paid to or is includible in the gross income of the Member within the
relevant Plan Year, or would have been so paid or includible but for a
reduction described in clause (i) immediately above, and (iii) that does
not exceed $200,000 or, for Plan Years beginning after December 31, 1993,
$150,000 (as adjusted at such time and in such manner as may be prescribed
in Section 401(a)(17) of the Code). With respect to Plan Years beginning
prior to January 1, 1994, "Top Heavy Compensation" shall mean compensation
as defined in Section 1.415-2(d)(1) and (2) of the Income Tax Regulations.
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
ARTICLE VIII
ADMINISTRATIVE COMMITTEE
8.1 APPOINTMENT, TERM OF SERVICE AND REMOVAL: The Board shall appoint an
Adminis trative Committee of not less than three (3) persons, the members of
which shall serve until their resignation, death or removal. Any member of the
Administrative Committee may resign at any time by mailing or delivering written
notice of such resignation to the Board. Any member of the Administrative
Committee may be removed by the Board, with or without cause, at any time by
mailing or delivering written notice to such person at the address set forth in
the records of the Employer. Vacancies in the Administrative Committee arising
by resignation, death, removal or otherwise shall be filled by such persons as
may be appointed by the Board.
8.2 POWERS: The Administrative Committee shall be a fiduciary and shall,
in that capacity, have the exclusive responsibility for the general
administration of the Plan, according to its terms and provisions, and shall
have all discretion and powers necessary to accomplish such purposes, including,
but not by way of limitation, the right, power, and authority:
(a) To make nondiscriminatory rules and regulations for the admin
istration of the Plan which are not inconsistent with the terms and
provisions hereof;
(b) To construe all terms, provisions, conditions, and limitations
of the Plan; and its construction thereof, shall be final and conclusive
on all persons or entities;
(c) To correct any defect, supply any omission, or reconcile any
inconsistency which may appear in the Plan in such manner and to such
extent as it shall deem necessary or appropriate, and its judgment in such
matters shall be final and conclusive as to all persons and entities;
(d) To select, employ, and compensate from time to time such
consultants, actuaries, accountants, attorneys, and other agents and
employees as the Administrative Committee may deem necessary or advisable
for the proper and efficient administration of the Plan; any agent, firm
or employee so selected by the Administrative Committee may be a
"disqualified person" or a "party in interest" but only if the
requirements of Section 4975(d) of the Code and Section 408(b) of the Act
have been satisfied;
(e) To determine all questions relating to the eligibility of
Employees to become Members, and to determine the period of Active Service
and the amount of Considered Compensation upon which the benefits of each
Member shall be calculated;
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
(f) To determine all controversies relating to the administration of
the Plan, including but not limited to: (i) differences of opinion arising
between an Employer and the Trustee or a Member, or any combination
thereof; and (ii) any questions it deems advisable to determine in order
to promote nondiscriminatory administration of the Plan for the benefit of
the Members and Beneficiaries;
(g) Subject to portfolio standards and guidelines which may be
established by the Trustee from time to time, to direct and instruct (or
to appoint an investment manager which would have the power to direct and
instruct) the Trustee in all matters relating to the preservation,
investment, reinvestment, management and disposition of the Trust Fund;
(h) To direct and instruct the Trustee in all matters relating to
the payment of Plan benefits and to determine the entitlement of a Member
or a Beneficiary to a benefit should he appeal a denial of his claim, or
any portion thereof;
(i) Subject to Section 10.7 and with the consent or ratification of
the Board, to take any action necessary or appropriate to cause to be
directly transferred to the Trustee any or all of the assets held with
respect to a Member under any other plan which expressly permits such
transfer and which otherwise satisfies the requirements for establishing a
Predecessor Plan Account described in Section 1.1. For the limited purpose
of being eligible to have a transfer described in the preceding sentence
made on behalf of an Employee who is not a Member, such Employee shall be
deemed to be a Member; provided, however, such Employee shall not be
entitled to authorize Contributions to the Plan or share in the allocation
of any Employer Contributions or forfeitures unless and until such
Employee satisfies the applicable eligibility requirements of the Plan.
Any amounts transferred to such Predecessor Plan Account shall not have
any effect on limitations under the Plan on Member or Employer
Contributions under the Plan;
(j) With the consent or ratification of the Board, to direct the
Trustee to enter into any agreement that the Administrative Committee
deems to be necessary or appropriate to effect any transaction described
in Section 8.2(i) or 11.7; and
(k) To delegate by written notice such clerical and recordation
duties of the Administrative Committee under the Plan as the
Administrative Committee may deem necessary or advisable for the proper
and efficient administration of the Plan or the Trust.
8.3 ORGANIZATION: The Administrative Committee shall select from among its
members a chairman, who shall preside at all of its meetings, and shall select a
secretary, who need not be a member of the Administrative Committee and who
shall keep all records, documents and data pertaining to its supervision of the
administration of the Plan.
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
8.4 QUORUM AND MAJORITY ACTION: A majority of the members of the
Administrative Committee constitutes a quorum for the transaction of business.
The majority vote of the members present at any meeting at which there is a
quorum will decide any question brought before that meeting. In addition, the
Administrative Committee may decide any question, taken without a meeting, by a
majority vote of all of its members, or by a consent executed by all of its
members.
8.5 SIGNATURES: The chairman, the secretary and any one or more of the
members of the Administrative Committee to which the Administrative Committee
has delegated the power, shall each, severally, have the power to execute any
document on behalf of the Administrative Committee, and to execute any
certificate or other written evidence of the action of the Administrative
Committee. The Trustee, after being notified of any such delegation of power in
writing, shall thereafter accept and may rely upon any document executed by such
member or members as representing the action of the Administrative Committee
until the Administrative Committee files with the Trustee a written revocation
of that delegation of power.
8.6 DISQUALIFICATION OF COMMITTEE MEMBER: No member of the Administrative
Committee shall have the right to vote or decide upon any matter relating solely
to himself under the Plan or to vote in any case in which his individual right
to claim any benefit under the Plan is particularly involved. In any case in
which an Administrative Committee member is so disqualified to act and the
remaining members cannot agree, the Board shall appoint a temporary substitute
member to exercise all the powers of the disqualified member concerning the
matter in which he is disqualified.
8.7 DISCLOSURE TO MEMBERS: The Administrative Committee shall make
available to each Member and Beneficiary for his examination such records,
documents and other data as are required under the Act, but only at reasonable
times during business hours. No Member or Beneficiary shall have the right to
examine any data or records reflecting the compensation paid to any other Member
or Beneficiary, and the Administrative Committee shall not be required to make
any other data or records available other than those required by the Act.
8.8 STANDARD OF PERFORMANCE: The Administrative Committee, and each of its
members, shall (i) use the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in conducting his business as the
administrator of the Plan; (ii) when exercising its power to direct investments,
divers ify the investments of the Plan so as to minimize the risk of large
losses unless under the circumstances it is clearly prudent not to do so; and
(iii) otherwise act in accordance with the provisions of the Plan and the Act.
The Administrative Committee shall exercise its responsibility and
authority hereunder in an uniform and non-discriminatory manner with respect to
all Members.
8.9 LIABILITY OF COMMITTEE AND LIABILITY INSURANCE: No member of the
Administrative Committee shall be liable for any act or omission of any other
member of the Administrative
::ODMA\PCDOCS\HOUSTON\998884\1
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<PAGE>
Committee, the Trustee, any investment manager appointed by the Administrative
Committee, or any other agent or representative appointed by the Administrative
Committee, except to the extent required by the Act and any other applicable
state or federal law, which liability cannot be waived. No member of the
Administrative Committee shall be liable for any act or omission on his own part
except to the extent required by the Act, and any other applicable state or
federal law, and then only if and to the extent such liability cannot be waived.
It is the express intent of the Plan to waive any such liability to the full
extent permitted by law.
Further, it is specifically provided that, if directed by the
Administrative Committee, the Trustee may purchase out of the Trust Fund
insurance for the members of the Administrative Committee, any other fiduciaries
appointed by the Administrative Committee and for the Trust Fund itself, to
cover liability or losses occurring by reason of the act or omission of any one
or more of the members of the Administrative Committee or any other appointed
fiduciary under the Plan or any other agents; provided, however, such insurance
permits recourse by the insurer against the members of the Administrative
Committee or the other concerned fiduciaries in the case of a breach of a
fiduciary obligation by one or more members of the Administrative Committee or
other fiduciary covered thereby.
8.10 EXEMPTION FROM BOND: No member of the Administrative Committee shall
be required to give bond for the performance of his duties hereunder, unless
required by the Act or by other law which cannot be waived.
8.11 NO COMPENSATION: The Administrative Committee shall serve without
compensation for its services, but shall be reimbursed by the Employer(s) for
all expenses properly and actually incurred in the performance of its duties
under the Plan, unless the Employer(s) elects to have such expenses paid out of
the Trust Fund. Each Employer shall bear such portion of such expense as shall
be determined by the Administrative Committee based upon the approximate total
amount in the Accounts of Members employed by it as compared to the approximate
total amount in the Accounts of all Members.
8.12 PERSONS SERVING IN DUAL FIDUCIARY ROLES: Any person, group of
persons, corporation, firm or other entity, may serve in more than one fiduciary
capacity with respect to the Plan, including the ability to serve both as
Trustee and as a member of the Administrative Committee.
8.13 ADMINISTRATOR: For all purposes of the Act, the Administrator of the
Plan shall be the Plan Sponsor. The Administrator of the Plan shall have final
responsibility for compliance with all reporting and disclosure requirements
imposed with respect to the Plan under any applicable federal or state law, or
under any regulations or other authority promulgated thereunder by the
appropriate governmental authority.
8.14 PAYMENT OF EXPENSES: All expenses incident to the administration of
the Plan and Trust, including but not limited to, legal, accounting, Trustee
fees, investment management, and record keeping, shall be paid by the Trustee
from the Trust Fund and, until paid, shall constitute a claim against the Trust
Fund which is paramount to the claims of Members and beneficiaries;
::ODMA\PCDOCS\HOUSTON\998884\1
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provided, however, that (i) the obligation of the Trustee to pay an expense from
the Trust Fund shall cease to exist to the extent such expense is paid by an
Employer and (ii) in the event the Trustee's compensation is paid from the Trust
Fund, any individual serving as Trustee who already receives full-time pay from
an Employer shall not receive any additional compensation for serving as
Trustee.
8.15 INDEMNIFICATION OF MEMBERS OF ADMINISTRATIVE COMMITTEE. To the full
extent permitted by law, the Plan Sponsor and each other Employer, jointly and
severally, shall indemnify and hold harmless each past, present and future
member of the Administrative Committee against, and each member of the
Administrative Committee shall be entitled without further act on his part to
indemnity from each Employer for, any and all losses, liabilities, costs and
expenses (including the amount of judgments, court costs, reasonable attorneys'
fees, and the amount of approved settlements made with a view to the curtailment
of costs of litigation, other than amounts paid to the Employer itself) incurred
by such member in connection with or arising out of any pending, threatened or
anticipated possible action, suit, or other proceeding, including any
investigation that might lead to such a proceeding, in which he is or may be
involved by reason of or in connection with his being or having been a member of
the Administrative Committee, whether or not he continues to be a member of the
Administrative Committee at the time of incurring any such losses, liabilities,
costs and expenses; provided, however, that such indemnity shall not include any
losses, liabilities, costs and expenses incurred by such member of the
Administrative Committee (i) with respect to any matters as to which he is
finally adjudged in any such action, suit or proceeding to have been guilty of
gross negligence or willful and culpable misconduct in the performance of his
duties as a member of the Administrative Committee, or (ii) with respect to any
matter to the extent that a settlement thereof is effected in an amount in
excess of the amount approved by the Plan Sponsor (or by the affected Employer
if not an Affiliated Employer), which approval shall not be unreasonably
withheld. No right of indemnification hereunder shall be available to, or
enforceable by, any such member of the Administrative Committee unless, within
sixty (60) days after his actual receipt of service of process in any such
action, suit or other proceeding (or such longer period as may be approved by
the Board), he shall have offered the Plan Sponsor (or affected Employer if not
an Affiliated Employer), in writing, the opportunity to handle and defend same
at its sole expense. The decision by the Plan Sponsor or other affected Employer
to handle the proceeding shall conclusively determine that such person is
entitled to the indemnity provided herein unless then otherwise expressly agreed
by the person. Until and unless a final judicial determination has been made
that indemnity is not applicable, all such person's expenses shall be promptly
and fully paid or reimbursed by the Plan Sponsor and each other Employer upon
demand by such person. The foregoing right of indemnification shall inure to the
benefit of the heirs, executors, administrators and personal representatives of
each such member of the Administrative Committee and shall be in addition to all
other rights to which such member may be entitled as a matter of law, contract,
or otherwise.
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ARTICLE IX
ADOPTION OF PLAN BY OTHER EMPLOYERS
9.1 ADOPTION PROCEDURE: Any business organization may, with the approval
of the Board, adopt the Plan for all or any classification of its Employees, as
permitted by Section 401(a) of the Code, by delivering to the Administrative
Committee:
(a) A certified resolution or consent of the sole proprietor,
managing partner(s) or board of directors (or equivalent governing
authority) of the adopting Employer, or a duly executed adoption
instrument (adopted and approved by the sole proprietor, managing
partner(s) or board of directors (or equivalent governing authority) of
the adopting Employer)) setting forth its agreement to be bound as an
Employer by all the terms, provisions, conditions and limitations of the
Plan, except those, if any, specifically set forth in the adoption
instrument;
(b) All information required by the Administrative Committee and the
Trustee with reference to Employees or Members; and
(c) The written consent of the Board to the adoption of this Plan.
Any adoption may be made retroactive to the beginning of a Plan Year by
complying with the foregoing conditions on or before the last day of that
Plan Year.
The provisions of the Plan shall apply separately and equally to each
Employer and its Employees in the same manner as is expressly provided herein
with respect to the Plan Sponsor and its Employees, except that the power to
appoint or otherwise affect the Administrative Committee or the Trustee and the
power to amend or terminate the Plan shall be exercised by the Plan Sponsor
alone. Nevertheless, any Employer may, with the consent of the Plan Sponsor,
incorporate in its adoption agreement or in an amendment document specific
provisions relating to the operation of the Plan, and such provisions shall
become a part of the Plan as to such Employer only.
9.2 NO JOINT VENTURE IMPLIED: The adoption instrument executed by an
Employer shall become, as to it and its Employees, a part of the Plan. However,
except as otherwise provided under the Plan, neither the adoption of the Plan by
an Employer, nor any act performed by it in relation to the Plan shall ever
create a joint venture or partnership relation between it and any other
Employer. Although the Accounts of Members employed by the Employers which adopt
the Plan shall be commingled for purposes of investment thereof, unless the
Administrative Committee and the Trustee are otherwise directed by the Board,
amounts held in the Trust Fund allocable to a particular Employer shall, on an
ongoing basis, be available to pay benefits to Members employed by that
Employer, and to pay benefits to Members employed by any other Employer which is
an Affiliated Employer required to be aggregated with the first such Employer,
but not otherwise. In addition, unless the Administrative Committee and Trustee
are otherwise directed by the Board, the Administrative Committee shall maintain
completely separate accounts and records for the Plan Sponsor and each other
Employer which is an Affiliated Employer required to be aggregated with
::ODMA\PCDOCS\HOUSTON\998884\1
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the Plan Sponsor (and Employees thereof who are Members), but otherwise the Plan
shall be maintained on a consolidated basis for the Plan Sponsor and all such
other Affiliated Employers. The Administrative Committee shall maintain
completely separate accounts and records for any Employer that is not an
Affiliated Employer, as distinguished from maintaining the Plan on a
consolidated basis with such other Employer.
9.3 TRANSFER OF MEMBERS: If an Employee of one Employer is Transferred to
the service of another Employer, the Employee shall maintain all of his rights
under the Plan. Contributions to the Transferred Employee's Employer Account
shall be handled in accordance with the provisions of Sections 4.2 and 4.8, and
his Active Service shall be considered uninterrupted, as if no Transfer had
occurred. Unless otherwise provided hereunder, Active Service with any Employer
shall count as Active Service with all Employers, whether before or after the
date that the Employer adopts the Plan.
::ODMA\PCDOCS\HOUSTON\998884\1
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ARTICLE X
AMENDMENT AND TERMINATION
10.1 RIGHT TO AMEND AND LIMITATIONS THEREON: The Administrative Committee
shall have the right to amend the Plan. Any amendment shall (i) be made by a
written instrument and executed by an appropriate officer of the Plan Sponsor,
(ii) set forth the nature of the amendment and its effective date (which may be
retroactive), and (iii) be supported by a certified copy of the resolution or
direction which authorized or ratified it. Although the Trustee shall be
expected to execute each amendment of the Plan, failure of the Trustee to
execute any such amendment shall not adversely affect the Plan Sponsor's
exclusive right to effectively amend the Plan without regard to any act or
forbearance on the part of the Trustee. No amendment shall:
(a) Except as otherwise specifically provided in the Plan, cause or
permit any Trust Fund assets to be diverted to any purpose other than the
exclusive benefit of the Members and their Beneficiaries;
(b) Decrease the accrued benefit of any Member or after July 30,
1984, eliminate a protected form of benefit in violation of Section
411(d)(6) of the Code;
(c) Increase the duties or liabilities of the Trustee without its
prior written consent; or
(d) Change the vesting schedule to one which would result in the
nonforfeitable percentage of the accrued benefit derived from Employer
Contributions (determined as of the later of the amendment's adoption date
or effective date) of any Member being less than such nonforfeitable
percentage computed under the Plan without regard to such amendment. If
the Plan's vesting schedule is amended, or if the Plan is amended in any
way that directly or indirectly affects the computation of the Member's
nonforfeitable percentage, or if the Plan is deemed amended by an
automatic change to or from a Top-Heavy vesting schedule, each Member with
at least three years of service with an Employer may elect, within a
reasonable period after the adoption of the amendment or change, to have
the nonforfeitable percentage computed under the Plan without regard to
such amend ment or change. With respect to Members who are not entitled to
be credited with at least one hour of service in any Plan Year beginning
after December 31, 1988, the immediately preceding sentence shall be
applied by substituting "five years of service" for "three years of
service". The period during which the election may be made shall begin no
later than the date upon which the amendment is adopted or deemed to be
made and shall end no later than the latest of the following dates: (1)
the date which is sixty (60) days after the day the amendment is adopted
or deemed to be made; (2) the date which is sixty (60) days after the day
that the amendment becomes effective; or (3) the date which is sixty (60)
days after the day that the Member is issued written notice of the
amendment by the Employer.
::ODMA\PCDOCS\HOUSTON\998884\1
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In the event of an amendment, each Employer will be deemed to have
consented to and adopted the amendment unless an Employer notifies the Plan
Sponsor and the Administrative Committee to the contrary in writing within
thirty (30) days after receipt of a copy of the amendment, in which case the
rejection will constitute a withdrawal from the Plan by that Employer.
10.2 MANDATORY AMENDMENTS: Except as otherwise provided in the Plan, or
except as otherwise prescribed by applicable law or other authority prescribed
thereunder by the appropriate governmental authority, the Contributions of each
Employer to the Plan are intended to be:
(a) Deductible under applicable provisions of the Code;
(b) Exempt from the federal Social Security Act, as amended;
(c) Exempt from withholding under the Code; and
(d) Excludable from any Employee's regular rate of pay, as that term
is defined under the Fair Labor Standards Act of 1938, as amended.
The Administrative Committee shall make such amendments to the Plan as may be
necessary to carry out this intention, and all such amendments may be made
retroactively.
10.3 WITHDRAWAL OF AN EMPLOYER: An Employer may withdraw from the Plan
either by rejecting an amendment or by giving written notice of its intent to
withdraw to the Administrative Committee and the Trustee. The Administrative
Committee shall then determine, within ninety (90) days following the receipt of
the rejection or notice, the portion of the Trust Fund that is attributable to
the Members employed by the withdrawing Employer and shall forward a copy of
such determination to the Trustee. Upon receipt of the determination, the
Trustee shall immediately segregate those assets attributable to the Members
employed by the withdrawing Employer and shall transfer those assets to the
successor trustee when it receives a designation of such successor from the
withdrawing Employer.
The withdrawal from the Plan will not terminate the Plan with respect to
the withdrawing Employer. Instead, the withdrawing Employer shall, as soon as
practical, either appoint a successor trustee or trustees and reaffirm the Plan
as a new and separate plan and trust intended to qualify under Sections 401(a)
and 501(a) of the Code, or establish another plan and trust intended to qualify
under Sections 401(a) and 501(a) of the Code.
The determination of the Administrative Committee, in its sole discretion,
of the portion of the Trust Fund that is attributable to the Members employed by
the withdrawing Employer shall be final and binding upon all persons or
entities; and, the Trustee's transfer of those assets to the desig nated
successor trustee shall relieve the Trustee of any further obligation or duty to
the withdrawing Employer, the Members employed by that Employer and their
Beneficiaries, and to the successor trustee.
::ODMA\PCDOCS\HOUSTON\998884\1
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10.4 VOLUNTARY AND INVOLUNTARY TERMINATION: Any Employer may terminate its
participation in the Plan by executing and delivering to the Administrative
Committee and the Trustee a notice which specifies the date on which its
participation in the Plan shall terminate. Likewise, participation of an
Employer in the Plan will automatically terminate upon the general as signment
by that Employer to or for the benefit of its creditors or the liquidation or
dissolution of that Employer without a successor (whether or not as the result
of a bankruptcy proceeding).
Upon termination of participation in the Plan by any Employer without
provision for continuation of the portion thereof attributable to such Employer,
subject to the provisions of this Section, the Trustee shall distribute to each
Member employed by the terminating Employer the vested amounts certified by the
Administrative Committee as then credited to the Accounts of the Members
employed by the terminating Employer. If a Member's vested Account balance
(derived from Employer and any Employee Contributions) which is distributable
hereunder does not exceed $3,500, such Account balance shall be distributed in
the form of a lump sum payment in cash. Such distribution may be made without
the necessity of obtaining the consent of the Member. If a Member's vested
Account balance (derived from Employer and any Employee Contributions) which is
distributable hereunder is in excess of $3,500, and if the Member consents to
the distribution, the Administrative Committee shall direct the Trustee to make
settlement of a Member's Account as provided in the second preceding sentence.
If a Member's vested Account balance (derived from Employer and any Employee
Contributions) which is distributable hereunder is in excess of $3,500, and if
the Member fails to consent to the distribution hereunder, the Administrative
Committee shall direct the Trustee to make settlement of the Member's Account by
distribution of a deferred commercial annuity which can be purchased (with the
net proceeds of the Member's vested Account balance) from a selected life
insurance company licensed to conduct business in the State of the situs of the
Trust, provided that such annuity (i) shall provide the same settlement
provisions as are set out in Article VI and (ii) shall be issued or endorsed as
nontransferable so that the owner thereof cannot sell, assign, discount, or
pledge as collateral for a loan or as security for the performance of an
obligation or for any other purpose his interest in such contract to any person,
other than the issuer of such annuity upon the surrender thereof, and, further
provided, that in the event of any conflict between applicable terms and
provisions of the Plan (regarding the timing or manner of payment of benefit)
and the terms and provisions of any such commercial annuity purchased hereunder,
the terms and provisions of the Plan shall control. Subject to subsequent
provisions hereof, distributions hereunder shall be made as soon as
administratively practicable, but in no event later than the time required under
applicable provisions of the Code. For the purpose of clarity and without
limiting the scope of the preceding provisions hereof, notwithstanding any of
the above provisions of this paragraph to the contrary, if a Member would be
entitled to an annuity described in Section 6.6(b) if the distribution under
this Article were made on account of an event described in Article VI, such
Member shall be entitled to an annuity which includes spousal survivor benefits
which are the same as the annuity described in Section 6.6(b), unless the
annuity is waived (with any required spousal consent) in accordance with the
provisions of Article VI which would apply if the distribution hereunder were
being made under Article VI.
In the event that (i) the Plan is maintained by the Plan Sponsor and at
least one other Employer which is an Affiliated Employer required to be
aggregated with the Plan Sponsor, (ii) on
::ODMA\PCDOCS\HOUSTON\998884\1
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an ongoing basis, assets of the Plan are available to pay benefits to any
Employee who is a Member (and Beneficiaries thereof) and thus the Plan should be
viewed as a single plan for purposes of Section 414(l) of the Code, and (iii)
the Plan is operated on a consolidated basis, then, in that event, should any
Employer which is an Affiliated Employer terminate participation in the Plan
without provision for continuation of the portion thereof attributable to such
Employer, subject to application of Section 10.5 (relating to partial
terminations), any forfeitures arising incident to the distributions described
above shall be allocated in accordance with Section 4.6 to the Members' Accounts
employed by the Plan Sponsor and any other remaining Employer which is an
Affiliated Employer. Any unapplied portion (comprised of excess amounts arising
from or attributable to Contributions of such terminating Affiliated Employer)
of any suspense account described in Section 4.3 shall be applied pro-rata to
reduce future Contributions of the Plan Sponsor and any other remaining Employer
which is an Affiliated Employer.
Regardless of whether the Plan is operated on an ongoing basis which
should result in the Plan being viewed as a single plan for purposes of Section
414(l) of the Code, in the event that the Plan is not operated on a consolidated
basis and separate accounts and records are maintained for each separate
Employer under the Plan, then should any Employer which is an Affiliated
Employer terminate participation in the Plan without provision for continuation
of the portion thereof attribu table to such Employer, Members employed by such
terminating Employer as of the date of such termination of participation in the
Plan shall have a 100% vested and nonforfeitable interest in their Accounts.
Similar rules shall apply with respect to any other Employer with respect to
which the Plan is not operated on a consolidated basis.
If the Plan should terminate, or should an Employer terminate its
participation in the Plan without causing the Plan to terminate, the Trustee, as
directed by the Administrative Committee, shall notify the Internal Revenue
Service of such termination of the Plan or termination of participation in the
Plan by an Employer, and the Plan Sponsor shall apply to the Internal Revenue
Service for a determination letter with respect to said termination of the Plan
or termination of participation in the Plan by an Employer. The Trustee shall
not distribute the assets in the Trust Fund in violation of applicable
provisions of Article VI of the Plan or prior to receipt of a copy of a
determination letter from the Internal Revenue Service to the effect that an
immediate distribution of Plan assets will not adversely affect the prior
qualification of the Plan under Sections 401(a) of the Code and the exemption of
the Trust under Section 501(a) of the Code.
Notwithstanding any other provision of the Plan to the contrary, amounts
allocated and credited to the affected Members' Accounts may be distributed in
any form authorized hereunder which constitutes a lump sum distribution
described in Section 401(k)(10) of the Code prior to the time that such amounts
would otherwise be distributed if (i) the Plan is terminated without
establishment of a successor plan in contravention of Section 401(k)(10)(A)(i)
of the Code, (ii) the Plan Sponsor or other Employer effects a disposition (to
an employer which is not an Affiliated Employer) of substantially all of the
assets (within the meaning of Section 409(d)(2) of the Code) used by such Plan
Sponsor or other Employer in a trade or business of such Plan Sponsor or other
Employer with respect to any former Member who continues employment with the
employer which acquires such assets, and the Plan Sponsor or other Employer
continues to maintain the Plan after
::ODMA\PCDOCS\HOUSTON\998884\1
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such disposition, or (iii) the Plan Sponsor or other Employer effects a
disposition (to an employer which is not an Affiliated Employer) of its interest
in a subsidiary (within the meaning of Section 409(d)(3) of the Code) with
respect to any former Member who continues employment with the subsidiary, and
the Plan Sponsor or other Employer continues to maintain the Plan after such
disposition. A distribution may be made under Section 401(k)(10) of the Code and
clauses (ii) and (iii) of this paragraph only if the Plan Sponsor or Employer
continues to maintain the Plan after the disposition. This requirement is
satisfied only if the purchaser does not maintain the Plan after the
disposition. A purchaser maintains the Plan if it adopts the Plan or otherwise
becomes an employer whose employees accrue benefits under the Plan. A purchaser
also maintains the Plan if the Plan is merged or consolidated with, or any
assets or liabilities are transferred from the Plan to, a plan maintained by the
purchaser in a transaction subject to Section 414(l)(1) of the Code. A purchaser
is not treated as maintaining the Plan merely because a plan that it maintains
accepts rollover contributions of amounts distributed by the Plan.
For purposes of the previous paragraph, in accordance with Section
1.401(k)-1(d)(3) of the Income Tax Regulations, a successor plan is any other
defined contribution plan maintained by the same employer. However, if fewer
than two percent (2%) of the employees who are eligible under the Plan at the
time of its termination are or were eligible under another defined contribution
plan at any time during the 24-month period beginning 12 months before the time
of the termination, the other plan is not a successor plan. The term "defined
contribution plan" means a plan that is a defined contribution plan as defined
in Section 414(i) of the Code, but does not include an employee stock ownership
plan as defined in Section 4975(e) or 409 of the Code or a simplified employee
pension as defined in Section 408(k) of the Code. A plan is a successor plan
only if it exists at the time the Plan is terminated or within the period ending
12 months after distribution of all assets from the Plan.
Pursuant to Section 10.5, the termination of participation in the Plan by
any one or more of the Employers will not constitute a termination of the Plan
with respect to any other remaining Employers. Upon satisfaction of all
liabilities to all Members and Beneficiaries hereunder, the Trust shall
terminate.
10.5 VESTING UPON DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS, TOTAL OR
PARTIAL TERMINATION: Notwithstanding any other provision of the Plan, in the
event that there is a total or partial termination, or complete discontinuance
of the Employer Contributions hereunder, the vesting schedule contained in
Sections 6.4 shall be inapplicable to the affected Members and each affected
Member thereupon shall have a full 100% vested interest in the amount credited
to his Account as of the end of the last Plan Year for which a substantial
Employer Contribution was made and in any amounts thereafter credited or
allocated to his Account; provided, however, that if the Employer shall
thereafter resume making substantial Contributions hereunder, all amounts
credited or allocated to an affected Member's Account with respect to the Plan
Year for which such Contributions are resumed, and the Plan Years for which they
are continued, shall vest only in accordance with the vesting schedules
contained in Sections 6.4. During any such period of termination or complete
discontinuance of Employer Contributions, all other provisions of the Plan shall
nevertheless continue in full force and effect, other than provisions for
Employer Contributions and the allocation
::ODMA\PCDOCS\HOUSTON\998884\1
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thereof to the affected Members' Accounts. Except as otherwise provided in
Section 10.4, the Plan shall not terminate earlier than the effective date as of
which the Plan is voluntarily terminated by the Plan Sponsor or by the Plan
Sponsor and the other Employers maintaining the Plan.
10.6 CONTINUANCE PERMITTED UPON SALE OR TRANSFER OF ASSETS: An Employer's
participation in the Plan will not automatically terminate in the event that it
consolidates, merges, and is not the surviving corporation; sells substantially
all of its assets; is a party to a reorganization and its Employees and
substantially all of its assets are transferred to another entity; or liquidates
or dissolves, if there is a successor entity. Instead, the resulting successor
person, firm, corporation, or other entity may assume and continue the Plan and
the Trust by executing a direction, entering into a contractual commitment or
adopting a resolution, as the case may be, providing for the continuance of the
Plan and the Trust simultaneous with or within one hundred twenty (120) days
after such consolidation, merger, sale, reorganization, liquidation or
dissolution. If after such one hundred twenty (120) day period, the successor
entity has not assumed and continued the Plan and otherwise complied with the
provisions of Section 10.3, the successor entity shall be deemed to have given
notice under Section 10.4 and its participation in the Plan will then
automatically terminate on the one hundred twenty-first (121st) day and, in that
event, the appropriate portion of the Trust Fund will be distributed exclusively
to the affected Members or their Beneficiaries as soon as practicable pursuant
to Section 10.4.
10.7 REQUIREMENT ON MERGER, TRANSFER, ETC.: Notwithstanding any other
provision hereof, in accordance with Section 414(l) of the Code, the Plan will
not be merged or consolidated with, nor shall any assets or liabilities of the
Plan be transferred to, any other plan unless each Member would receive (if the
Plan then terminated) a benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit that he would have been
entitled to receive immediately before the merger, consolidation, or transfer
(if the Plan had then terminated). In addition, any accrued benefits under the
Plan which are subject to and protected under Section 411(d)(6) of the Code
shall not be reduced or eliminated in violation of Section 411(d)(6) of the Code
incident to (i) any merger, consolidation, spin-off or transfer of such accrued
benefits or (ii) any transaction involving an amendment or having the effect of
an amendment of the Plan to transfer such accrued benefits.
Subject to Sections 8.2(i) and 8.2(j), the Trustee, as directed by the
Administrative Committee, shall have the authority to enter into (i) an
agreement to merge or consolidate the Plan with another plan which meets the
requirements of Sections 401(a) and 501(a) of the Code or (ii) an agreement to
accept the direct transfer of assets from any such plan or to transfer Plan
assets to any such plan. To the extent that any such assets that are directly
transferred to the Plan are comprised of amounts attributable to elective
deferrals (described in Section 402(g)(3) of the Code), or qualified non Salary
Reduction Contributions (described in Section 401(m)(4)(C) of the Code), or
matching contributions (described in Section 401(m)(4)(A) of the Code) that are
treated as elective deferrals under Section 401(k) of the Code, such amounts
shall remain subject to any limitations on distribution thereof and, thus, shall
not be distributed under the Plan prior to such time as is permitted under the
transferor plan and Section 401(k) of the Code. Subject to the Code Sections
described in the immediately preceding sentence, if assets are accepted on
behalf of any Employee
::ODMA\PCDOCS\HOUSTON\998884\1
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prior to the date that such Employee is eligible to enter the Plan as an active
Member, such Employee shall be deemed to be a Member; provided however, such
Employee shall not be entitled to authorize Contributions to the Plan or share
in the allocation of any Employer Contributions unless and until such Employee
meets the applicable eligibility requirements of the Plan.
The Trustee shall not consent or be a party to a merger, consolidation or
transfer of assets with a defined benefit plan, except with respect to a
transfer which the Administrative Committee has determined to be an "elective
transfer" (described below). The Trustee shall hold, administer and distribute
the transferred assets as a part of the Trust Fund and the Administrative
Committee shall maintain a separate Predecessor Plan Account for the benefit of
each Employee on whose behalf the Trustee accepted the transfer in order to
reflect the value of the transferred assets. Unless a transfer of assets to the
Plan is a Rollover Contribution (including a direct rollover contribution
described in Section 401(a)(31) of the Code) or an "elective transfer" (defined
below), the Plan shall apply the optional forms of benefit protections described
in this Section and in Section 10.1 to all of the transferred assets. A transfer
is an elective transfer if: (i) the transfer satisfies the preceding provisions
of this Section; (ii) the transfer is voluntary, under a fully informed election
by the Member; (iii) the Member has an alternative that retains his Code Section
411(d)(6) protected benefits (including an option to leave his benefit in the
transferor plan if that plan is not terminating and the Member's transferor plan
account exceeds $3,500); (iv) the transfer satisfies the applicable spousal
consent requirements of the Code; (v) the transferor plan satisfies the QJSA
notice requirements of the Code, if the Member's transferred benefit is subject
to those requirements; (vi) the Member has the right to immediate distribution
from the transferor plan in lieu of the el ective transfer; (vii) the
transferred benefit is the entire nonforfeitable accrued benefit under the
transferor plan (1) calculated to be at least the greater of the single sum
distribution provided by the transferor plan for which the Member is eligible or
the present value of the Member's accrued benefit under the transferor plan
payable at that plan's normal retirement age and (2) calculated by using an
interest rate that complies with the requirements of Section 417(e) of the Code
and subject to the overall limitations of Section 415 of the Code; (viii) the
Member has 100% vested interest in the transferred benefit; and (ix) the
transfer otherwise satisfies applicable regulations or other guidance issued
under applicable provisions of the Code by the appropriate governmental
authority.
::ODMA\PCDOCS\HOUSTON\998884\1
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ARTICLE XI
MISCELLANEOUS
11.1 PLAN NOT AN EMPLOYMENT CONTRACT: The adoption and maintenance of the
Plan shall not be deemed to be a contract between any Employer and its Employees
which gives any Employee the right to be retained in the employment of any
Employer; to interfere with the rights of any Employer to discharge any Employee
at any time; or to interfere with any Employee's right to terminate his
employment at any time.
11.2 BENEFITS PROVIDED SOLELY FROM TRUST FUND: All benefits payable under
the Plan shall be paid or provided for solely from the Trust Fund; neither the
Administrative Committee nor any Employer assumes any liability or
responsibility therefor. Each Member assumes all risks in connection with any
decrease in the market value of any common stocks or other investments held on
his behalf in accordance with the provisions of the Plan.
11.3 SPENDTHRIFT PROVISION: No principal or income payable, or to become
payable, from the Trust Fund will be subject to: (i) anticipation or assignment
by any Member or by any Beneficiary; (ii) attachment by, interference with, or
control of any creditor of a Member or Beneficiary; or (iii) being taken or
reached by any legal or equitable process in satisfaction of any debt or
liability of a Member or Beneficiary prior to its actual receipt by such Member
or Beneficiary. Any attempted conveyance, transfer, assignment, mortgage,
pledge, or encumbrance of the Trust Fund, any part or interest in it, by a
Member or Beneficiary prior to distribution will be void, whether that
conveyance, transfer, assignment, mortgage, pledge, hypothecation or encumbrance
is intended to take place or become effective before or after any distribution
of Trust Fund assets or the termination of the Trust. Furthermore, the Trustee
shall not be required to recognize any conveyance, transfer, assignment,
mortgage, pledge or encumbrance by a Member or Beneficiary of the Trust, any
part or interest in it, or to pay any money or thing of value to any creditor or
assignee of a Member or Beneficiary for any cause whatsoever.
This Section shall also apply to the creation, assignment, or recognition
of a right to any benefit payable with respect to a Member pursuant to a
domestic relations order, unless such order is determined to be a qualified
domestic relations order (as defined in Section 414(p) of the Code). In
addition, in the event that, pursuant to a qualified domestic relations order
described above, an Account or subaccount is established for the benefit of the
former spouse or dependent of a Member ("alternate payee"), and in the further
event that Members are entitled to direct the investment of their Accounts in
accordance with Section 4.10, unless the Administrative Committee otherwise
prescribes pursuant to uniformly applied nondiscriminatory rules formulated by
the Administrative Committee, any alternate payee shall be considered to be a
Member for purposes of Section 4.10 and, thus, shall be entitled to direct the
investment of such Account or subaccount.
In the event that the Administrative Committee receives notice that a
domestic relations order that is intended to be a qualified domestic relations
order is being prepared and will be provided to the Administrative Committee
within a reasonably short time, the Administrative Committee may
::ODMA\PCDOCS\HOUSTON\998884\1
XI-1
<PAGE>
place a temporary hold on the distribution of benefits under the Plan to the
affected Member, pending (a) the determination of whether such order is a
qualified domestic relations order within the meaning of Section 414(p) of the
Code, and (b) the rights of the alternate payee under such order.
11.4 GENDER, TENSE AND HEADINGS: Whenever the context so requires, words
of the mascu line gender used herein shall include the feminine and neuter, and
words used in the singular shall include the plural. The words "herein,"
"hereof," "hereunder," and other similar compounds of the word "here" shall
refer to the entire Plan, not to any particular Section or provision of the
Plan. Headings of Articles, Sections and subsections as used herein are inserted
solely for convenience and reference and constitute no part of the Plan.
11.5 GENERAL TRANSITION RULES RELATING TO AMENDMENT, RESTATEMENT AND
CONTINUATION OF PLAN:
(a) APPLICATION OF PLAN: Except as otherwise provided under the
Plan, in the event that the Employer adopts the Plan as an amendment,
restatement and continuation of a Prior Plan, the provisions of the Plan
shall apply only to Employees whose employment with the Employer
terminates after the Effective Date of the Plan. If an Employee's
employment with the Employer terminates prior to the effective date of the
Employer's adoption of the Plan, the former Employee shall be entitled to
benefits under the terms and provisions of Employer's Prior Plan as that
plan existed on the date of the termination of employment.
(b) MAINTENANCE OF ACCOUNTS: Amounts credited to a Member's accounts
under the Plan as in effect immediately prior to the Effective Date of its
amendment, restatement and continuation hereunder shall constitute the
opening balances of corresponding Accounts established under the Plan.
(c) EMPLOYEE ELECTIONS: Employee elections (under the Plan as in
effect immediately prior to the Effective Date of its amendment,
restatement and continuation hereunder) with respect to Employee
contribution rates, investment elections, etc., shall continue in effect
under the Plan unless the Administrative Committee otherwise directs.
Similarly, any beneficiary designation in effect under the Plan
immediately prior to its amendment, restatement and continuation hereunder
shall be deemed to be a valid designation filed with the Administrative
Committee under applicable provisions of the Plan, to the extent
consistent with the Plan and applicable law and regulations or other
authority issued thereunder by the appropriate governmental authority,
unless and until the Member revokes such Beneficiary designation under
applicable provisions of the Plan.
(d) CONTRIBUTIONS: With respect to Plan Years that commenced prior
to the Effective Date, the terms and provisions of the Plan document and
Prior Plan document (as in effect at such time) which govern determination
of the amount of any contributions (therein described) and (ii) the
Members entitled to share in the
::ODMA\PCDOCS\HOUSTON\998884\1
XI-2
<PAGE>
allocation of contributions shall apply to Members who were subject
thereto during such Plan Years solely for the purpose of determining (i)
the amount of any such contributions and (ii) the Members who are entitled
to share in the allocations thereof for any such Plan Year.
(e) WITHDRAWALS: Except to the extent inconsistent with applicable
law and regulations or other authority issued thereunder by the
appropriate governmental authority, and unless the Administrative
Committee otherwise directs, any withdrawals authorized under the Plan, as
in effect immediately prior to the Effective Date of its amendment,
restatement and continuation hereunder, shall continue to be governed by
the terms and provisions of the Plan as it existed on the date of the
withdrawal. Provided, however, any withdrawals permitted under the Plan
after its effective date shall be governed solely by applicable terms and
provisions of the Plan.
(f) ACCOUNTING: Trust accounting for income, gain, loss,
appreciation and depreciation and forfeitures under the Plan, as in effect
immediately prior to the Effective Date, shall not be affected by its
amendment, restatement and continuation hereunder.
(g) DISTRIBUTION OF BENEFITS: The applicable provisions of the Plan
document as in effect at the time of the distribution of benefits shall,
on a consistent and nondiscriminatory basis, apply to the former Members
and Beneficiaries who received a distribution at such time.
11.6 SEVERABILITY: Each term and provision of the Plan is severable, and
the invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of any other term or provision.
11.7 GOVERNING LAW; PARTIES TO LEGAL ACTIONS: The terms and provisions of
the Plan shall be construed, administered, and governed under the laws of the
State of Texas and, to the extent applicable, by the laws of the United States.
The Trustee or any Employer may at any time initiate a legal action or
proceeding for the settlement of the account of the Trustee, for the
determination of any question, or for instructions. The only necessary parties
to any such action or proceeding are the Trustee, the Plan Sponsor or other
affected Employer; however, any other person may be included as a party at the
election of the Trustee, the Plan Sponsor or other affected Employer.
11.8 NOTICES: Except as otherwise specifically provided under the Plan,
any notice, description, explanation, direction, consent, election, waiver or
other information required or permitted to be given under the Plan shall be
sufficient if it is in writing and otherwise complies with the requirements of
applicable provisions of the Plan and rules established by the Administrative
Committee and if hand-delivered to the Member, Beneficiary, member of the
Administrative Committee, Trustee or other person to whom such communication is
to be given, or if sent by registered mail (return receipt requested) or by
first class mail or any other reasonable method to
::ODMA\PCDOCS\HOUSTON\998884\1
XI-3
<PAGE>
such person at the address last furnished by such person. Any such communication
described in the immediately preceding sentence shall be effective as of the
date of the postmark if mailed via registered mail and the return receipt is
received by the sender, or upon actual receipt by the party receiving such
communication in the event that (i) such return receipt is not received by the
sender or (ii) such communication was given by in-hand delivery or by first
class mail or any other reasonable method.
11.9 COUNTERPARTS: This Plan may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument. It shall not be necessary that any
single counterpart hereof be executed by all parties so long as each party
executes at least one counterpart.
IN WITNESS WHEREOF, the Plan Sponsor has caused this Plan to be executed
by its duly authorized officer this ______ day of ________________, 1996, to be
effective as of July 1, 1995, except as otherwise provided under certain terms
or provisions of the Plan.
PLAN SPONSOR:
BANK UNITED OF TEXAS FSB
ATTEST:
By: By:
Printed Name: Printed Name:
Title: Title:
TRUSTEE:
FIDELITY MANAGEMENT
TRUST COMPANY
By:
Printed Name:
Title:
::ODMA\PCDOCS\HOUSTON\998884\1
XI-4
<PAGE>
THE STATE OF TEXAS ss.
ss.
COUNTY OF HARRIS ss.
BEFORE ME, the undersigned authority, on this day personally appeared
______________________________________________, as __________________________ of
Bank United of Texas FSB, known to me to be the person whose name is subscribed
to the foregoing instrument and acknowledged to me that he executed the same for
the purposes and consideration therein expressed, in the capacity therein set
forth, but not individually, and as the act and deed of said Bank United of
Texas FSB.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this _____ day of ______________,
19___.
Notary Public in and for
the State of Texas
COMMONWEALTH OF ss.
MASSACHUSETTS ss.
ss.
COUNTY OF SUFFOLK ss.
BEFORE ME, the undersigned authority, on this day personally appeared
______________________________________________, as __________________________ of
Fidelity Management Trust Company, known to me to be the person whose name is
subscribed to the foregoing instrument and acknowledged to me that he executed
the same for the purposes and consideration therein expressed, in the capacity
therein set forth, but not individually, and as the act and deed of said
__________________________________.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this _____ day of ______________,
19___.
Notary Public in and for
the Commonwealth of Massachusetts
XI-5
EXHIBIT 5.1
June 25, 1999
Bank United Corp.
3200 Southwest Freeway Suite 2600
Houston, Texas 77027
Ladies and Gentlemen:
The undersigned is the General Counsel of Bank United Corp., a Delaware
corporation (the "Company"). This letter is delivered in connection with the
registration under the Securities Act of 1933, as amended (the "Act") of
interests (the "Interests") in the Bank United 401(k) Retirement Savings Plan
(the "Plan"), which permits participants to acquire shares of Class A Common
Stock, $.01 par value, of the Company (the "Shares") through open market
purchases. The Trustee for the Plan and related master trust is Fidelity Trust
Management.
I have reviewed the Form S-8 Registration Statement ("Registration Statement")
filed with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"), with respect to Interests in the
Plan and the Shares. I also have examined (i) the Certificate of Incorporation
of the Company, as amended; (ii) the By-laws of the Company, as amended; (iii)
certain resolutions adopted by the Board of Directors of the Company and the
Bank and committees thereof; and (iv) such other documents and records as I have
deemed necessary for purposes hereof.
I have assumed the genuineness of all signatures, the authenticity of all
documents and records submitted to me as originals, the conformity to authentic
original documents and records of all documents and records submitted to me as
copies, and the truthfulness of all statements of fact contained therein. Based
on the foregoing and subject to the qualifications set forth herein, and having
due regard for such legal considerations as I deem relevant, I am of the opinion
that:
1. The Company is a corporation duly incorporated and validly existing under
the laws of the State of Delaware.
2. The Interests, when issued in accordance with the terms and conditions of
the Plan, will be legally issued.
The foregoing opinion is based on and is limited to the law of the State of
Delaware, and the State of Texas, and I render no opinion with respect to the
law of any other
jurisdiction.
<PAGE>
This opinion is solely for your benefit and may not be relied on or furnished to
any other person without the prior written consent of the undersigned. I consent
to the filing of this opinion with the Securities and Exchange Commission as an
exhibit to the Registration Statement.
Very truly yours,
Jonathon K. Heffron
EXHIBIT 15.1
Bank United Corp.
3200 Southwest Freeway, Suite 2600
Houston, Texas
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of Bank United Corp. and subsidiaries for the periods ended March
31, 1999 and 1998 and December 31, 1998 and 1997, as indicated in our reports
dated April 27, 1999 and January 22, 1999, respectively; because we did not
perform an audit, we expressed no opinion on that information.
We are aware that our reports referred to above, which were included in your
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999 and
December 31, 1998, are being used in this
Registration Statement.
We also are aware that the aforementioned reports, pursuant to Rule 436(c) under
the Securities Act of 1933, are not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
DELOITTE & TOUCHE LLP
Houston, Texas
June 25, 1999
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Bank United Corp. on Form S-8 of our report dated October 21, 1998,
appearing in the Annual Report on Form 10-K of Bank United Corp. for the year
ended September 30, 1998.
DELOITTE & TOUCHE LLP
Houston, Texas
June 25, 1999
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the proposed
registration on one or more Forms S-8 under the Securities Act of 1933, as
amended, by Bank United Corp., a Delaware corporation (the "Company") and/or
Bank United (the "Bank"), relating to the offering to participants in the 401(k)
Retirement Savings Plan ("Plan") of the Bank, of shares of the Company's Class A
Common Stock, including the related interests in the Plan, the undersigned
director of the Company hereby constitutes and appoints each of Barry C.
Burkholder and Jonathon K. Heffron, with full power to act without the other,
the undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and on the undersigned's
behalf and in the undersigned's name, place and stead, in any and all
capacities, to sign one or more Registration Statements on Form S-8 relating to
such securities and any amendments or post-effective amendments thereto and file
the same with Securities and Exchange Commission and/or the U.S. Office of
Thrift Supervision and to sign and file all documents required to be filed with
respect thereto with any regulatory authority, granting unto said attorney full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, thereby ratifying and confirming all that the sale
attorney-in-fact and agent may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 30th day of April, 1999.
/s/ DR. LAWRENCE CHIMERINE
Dr. Lawrence Chimerine
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the proposed
registration on one or more Forms S-8 under the Securities Act of 1933, as
amended, by Bank United Corp., a Delaware corporation (the "Company") and/or
Bank United (the "Bank"), relating to the offering to participants in the 401(k)
Retirement Savings Plan ("Plan") of the Bank, of shares of the Company's Class A
Common Stock, including the related interests in the Plan, the undersigned
director of the Company hereby constitutes and appoints each of Barry C.
Burkholder and Jonathon K. Heffron, with full power to act without the other,
the undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and on the undersigned's
behalf and in the undersigned's name, place and stead, in any and all
capacities, to sign one or more Registration Statements on Form S-8 relating to
such securities and any amendments or post-effective amendments thereto and file
the same with Securities and Exchange Commission and/or the U.S. Office of
Thrift Supervision and to sign and file all documents required to be filed with
respect thereto with any regulatory authority, granting unto said attorney full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, thereby ratifying and confirming all that the sale
attorney-in-fact and agent may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 29th day of April, 1999.
/s/ DAVID M. GOLUSH
David M. Golush
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the proposed
registration on one or more Forms S-8 under the Securities Act of 1933, as
amended, by Bank United Corp., a Delaware corporation (the "Company") and/or
Bank United (the "Bank"), relating to the offering to participants in the 401(k)
Retirement Savings Plan ("Plan") of the Bank, of shares of the Company's Class A
Common Stock, including the related interests in the Plan, the undersigned
director of the Company hereby constitutes and appoints each of Barry C.
Burkholder and Jonathon K. Heffron, with full power to act without the other,
the undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and on the undersigned's
behalf and in the undersigned's name, place and stead, in any and all
capacities, to sign one or more Registration Statements on Form S-8 relating to
such securities and any amendments or post-effective amendments thereto and file
the same with Securities and Exchange Commission and/or the U.S. Office of
Thrift Supervision and to sign and file all documents required to be filed with
respect thereto with any regulatory authority, granting unto said attorney full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, thereby ratifying and confirming all that the sale
attorney-in-fact and agent may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 27th day of April, 1999.
/s/ PAUL M. HORVITZ
Paul M. Horvitz
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the proposed
registration on one or more Forms S-8 under the Securities Act of 1933, as
amended, by Bank United Corp., a Delaware corporation (the "Company") and/or
Bank United (the "Bank"), relating to the offering to participants in the 401(k)
Retirement Savings Plan ("Plan") of the Bank, of shares of the Company's Class A
Common Stock, including the related interests in the Plan, the undersigned
director of the Company hereby constitutes and appoints each of Barry C.
Burkholder and Jonathon K. Heffron, with full power to act without the other,
the undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and on the undersigned's
behalf and in the undersigned's name, place and stead, in any and all
capacities, to sign one or more Registration Statements on Form S-8 relating to
such securities and any amendments or post-effective amendments thereto and file
the same with Securities and Exchange Commission and/or the U.S. Office of
Thrift Supervision and to sign and file all documents required to be filed with
respect thereto with any regulatory authority, granting unto said attorney full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, thereby ratifying and confirming all that the sale
attorney-in-fact and agent may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 28th day of April, 1999.
/s/ ALAN E. MASTER
Alan E. Master
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the proposed
registration on one or more Forms S-8 under the Securities Act of 1933, as
amended, by Bank United Corp., a Delaware corporation (the "Company") and/or
Bank United (the "Bank"), relating to the offering to participants in the 401(k)
Retirement Savings Plan ("Plan") of the Bank, of shares of the Company's Class A
Common Stock, including the related interests in the Plan, the undersigned
director of the Company hereby constitutes and appoints each of Barry C.
Burkholder and Jonathon K. Heffron, with full power to act without the other,
the undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and on the undersigned's
behalf and in the undersigned's name, place and stead, in any and all
capacities, to sign one or more Registration Statements on Form S-8 relating to
such securities and any amendments or post-effective amendments thereto and file
the same with Securities and Exchange Commission and/or the U.S. Office of
Thrift Supervision and to sign and file all documents required to be filed with
respect thereto with any regulatory authority, granting unto said attorney full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, thereby ratifying and confirming all that the sale
attorney-in-fact and agent may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 29th day of April, 1999.
/s/ LEWIS S. RANIERI
Lewis S. Ranieri
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the proposed
registration on one or more Forms S-8 under the Securities Act of 1933, as
amended, by Bank United Corp., a Delaware corporation (the "Company") and/or
Bank United (the "Bank"), relating to the offering to participants in the 401(k)
Retirement Savings Plan ("Plan") of the Bank, of shares of the Company's Class A
Common Stock, including the related interests in the Plan, the undersigned
director of the Company hereby constitutes and appoints each of Barry C.
Burkholder and Jonathon K. Heffron, with full power to act without the other,
the undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and on the undersigned's
behalf and in the undersigned's name, place and stead, in any and all
capacities, to sign one or more Registration Statements on Form S-8 relating to
such securities and any amendments or post-effective amendments thereto and file
the same with Securities and Exchange Commission and/or the U.S. Office of
Thrift Supervision and to sign and file all documents required to be filed with
respect thereto with any regulatory authority, granting unto said attorney full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, thereby ratifying and confirming all that the sale
attorney-in-fact and agent may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 27th day of April, 1999.
/s/ SALVATORE A. RANIERI
Salvatore A. Ranieri
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the proposed
registration on one or more Forms S-8 under the Securities Act of 1933, as
amended, by Bank United Corp., a Delaware corporation (the "Company") and/or
Bank United (the "Bank"), relating to the offering to participants in the 401(k)
Retirement Savings Plan ("Plan") of the Bank, of shares of the Company's Class A
Common Stock, including the related interests in the Plan, the undersigned
director of the Company hereby constitutes and appoints each of Barry C.
Burkholder and Jonathon K. Heffron, with full power to act without the other,
the undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and on the undersigned's
behalf and in the undersigned's name, place and stead, in any and all
capacities, to sign one or more Registration Statements on Form S-8 relating to
such securities and any amendments or post-effective amendments thereto and file
the same with Securities and Exchange Commission and/or the U.S. Office of
Thrift Supervision and to sign and file all documents required to be filed with
respect thereto with any regulatory authority, granting unto said attorney full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, thereby ratifying and confirming all that the sale
attorney-in-fact and agent may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 30th day of April, 1999.
/s/ SCOTT A. SHAY
Scott A. Shay
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the proposed
registration on one or more Forms S-8 under the Securities Act of 1933, as
amended, by Bank United Corp., a Delaware corporation (the "Company") and/or
Bank United (the "Bank"), relating to the offering to participants in the 401(k)
Retirement Savings Plan ("Plan") of the Bank, of shares of the Company's Class A
Common Stock, including the related interests in the Plan, the undersigned
director of the Company hereby constitutes and appoints each of Barry C.
Burkholder and Jonathon K. Heffron, with full power to act without the other,
the undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and on the undersigned's
behalf and in the undersigned's name, place and stead, in any and all
capacities, to sign one or more Registration Statements on Form S-8 relating to
such securities and any amendments or post-effective amendments thereto and file
the same with Securities and Exchange Commission and/or the U.S. Office of
Thrift Supervision and to sign and file all documents required to be filed with
respect thereto with any regulatory authority, granting unto said attorney full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, thereby ratifying and confirming all that the sale
attorney-in-fact and agent may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 27th day of April, 1999.
/s/ PATRICIA A. SLOAN
Patricia A. Sloan
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the proposed
registration on one or more Forms S-8 under the Securities Act of 1933, as
amended, by Bank United Corp., a Delaware corporation (the "Company") and/or
Bank United (the "Bank"), relating to the offering to participants in the 401(k)
Retirement Savings Plan ("Plan") of the Bank, of shares of the Company's Class A
Common Stock, including the related interests in the Plan, the undersigned
director of the Company hereby constitutes and appoints each of Barry C.
Burkholder and Jonathon K. Heffron, with full power to act without the other,
the undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and on the undersigned's
behalf and in the undersigned's name, place and stead, in any and all
capacities, to sign one or more Registration Statements on Form S-8 relating to
such securities and any amendments or post-effective amendments thereto and file
the same with Securities and Exchange Commission and/or the U.S. Office of
Thrift Supervision and to sign and file all documents required to be filed with
respect thereto with any regulatory authority, granting unto said attorney full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, thereby ratifying and confirming all that the sale
attorney-in-fact and agent may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 28th day of April, 1999.
/s/ MICHAEL S. STEVENS
Michael S. Stevens
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the proposed
registration on one or more Forms S-8 under the Securities Act of 1933, as
amended, by Bank United Corp., a Delaware corporation (the "Company") and/or
Bank United (the "Bank"), relating to the offering to participants in the 401(k)
Retirement Savings Plan ("Plan") of the Bank, of shares of the Company's Class A
Common Stock, including the related interests in the Plan, the undersigned
director of the Company hereby constitutes and appoints each of Barry C.
Burkholder and Jonathon K. Heffron, with full power to act without the other,
the undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and on the undersigned's
behalf and in the undersigned's name, place and stead, in any and all
capacities, to sign one or more Registration Statements on Form S-8 relating to
such securities and any amendments or post-effective amendments thereto and file
the same with Securities and Exchange Commission and/or the U.S. Office of
Thrift Supervision and to sign and file all documents required to be filed with
respect thereto with any regulatory authority, granting unto said attorney full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, thereby ratifying and confirming all that the sale
attorney-in-fact and agent may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 27th day of April, 1999.
/s/ KENRICK R. WILSON III
Kenrick R. Wilson III
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that in connection with the proposed
registration on one or more Forms S-8 under the Securities Act of 1933, as
amended, by Bank United Corp., a Delaware corporation (the "Company") and/or
Bank United (the "Bank"), relating to the offering to participants in the 401(k)
Retirement Savings Plan ("Plan") of the Bank, of shares of the Company's Class A
Common Stock, including the related interests in the Plan, the undersigned
director of the Company hereby constitutes and appoints each of Barry C.
Burkholder and Jonathon K. Heffron, with full power to act without the other,
the undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and on the undersigned's
behalf and in the undersigned's name, place and stead, in any and all
capacities, to sign one or more Registration Statements on Form S-8 relating to
such securities and any amendments or post-effective amendments thereto and file
the same with Securities and Exchange Commission and/or the U.S. Office of
Thrift Supervision and to sign and file all documents required to be filed with
respect thereto with any regulatory authority, granting unto said attorney full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, thereby ratifying and confirming all that the sale
attorney-in-fact and agent may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 27th day of April, 1999.
/s/ ANTHONY J. NOCELLA
Anthony J. Nocella
